Essay about Abc Activity-Based Costing and Management
Activity-Based Costing and Management
Chapter 7 addresses the following questions:
Q1 How is activity-based costing (ABC) different from traditional costing? Q2 What are activities, and how are they identified?
Q3 What process is used to assign costs in an ABC system?
Q4 How are cost drivers selected for activities?
Q5 What is activity-based management (ABM)?
Q6 What are the benefits, costs, and limitations of ABC and ABM?
These learning questions (Q1 through Q6) are cross-referenced in the textbook to individual exercises and problems.
The textbook uses a coding system to identify the complexity of individual requirements in the exercises and problems.
Questions Having a Single …show more content…
7.2 Organization-sustaining activities are activities related to the overall organization and unaffected by customers served or by quantities of products, batches, or units. Facility- sustaining activities are activities related to the overall operations of a production facility and unaffected by customers served or by quantities of products, batches, or units. Customer-sustaining activities are customer service activities that are independent of sales volumes and mix. Product-sustaining activities occur to support a product line or a single product if it is not part of a product line. Batch-level activities increase as the number of batches increase. These activities include setup and monitoring batches of product. Unit- level activities increase proportionately with production volumes or sales volumes.
7.3 Because ABC