Activity-Based Costing (ABC) Flashcards
1
Q
Compare ABC to traditional Costing
A
Traditional - One cost driver (volume)
ABC - Multiple Cost Drivers
2
Q
Activity-Based Costing
A
costing system that divides production into activities where costs are accumulated and allocated based on the LEVEL OF ACTIVITY demanded by the product
3
Q
Characteristics of ABC
A
increase number of cost pools (prodction orders, material handling) and allocation bases (# of production orders, pounds)
