Managerial Accounting Chapter 3

Front 1

Activity Based Costing

Back 1

a technique that attempts to assign overhead costs more accurately to products.

Front 2

Activity

Back 2

an event that causes the consumption of overhead resources.

Front 3

Each Activity has its own

Back 3

1.activity cost pool
2. activity measure
3. activity rate

Front 4

Activity Cost Pool

Back 4

Cost bucket in which costs related to a particular activity measure are accumulated.

Front 5

Activity Measure

Back 5

Expresses how much of the activity is carried out and it is used as the allocation base for applying overhead costs.

Front 6

Activity Rate

Back 6

predetermined overhead rate in an activity based costing system.

Front 7

Unit-Level Activities

Back 7

are performed each time a unit is produced. Costs of unit level activities should be proportional to the number of units produced.

Front 8

Batch Level Activities

Back 8

consists of tasks that are performed each time a batch is processed. Costs depend on the number of batches processed rather than on the number of units.

Front 9

Product Level Activities

Back 9

relate to specific products and typically must be carried out regardless of how many batches or units of the product are made.

Front 10

Facility Level activities

Back 10

activities that are carried out regardless of which products are produced, how many batches, or how many units.