Second Half Flashcards
Activity Based Costing (ABC)
Designed to provide managers with cost information for strategic and other decisions that affect capacity, fixed and variable costs
transaction drivers
simple counts of the number of times a activity occurs
duration driver
amount of time to perform an activity
activity measure
cost driver
activity cost pool
amount of costs accumulated for a single activity
product level activities
incurred for each product produced and not dependent on the number of units or batches
standard
a norm for measuring performance
standard quality per unit
the amount of material per unit, allowing for expected waste
Materials price variance formula
AQ(AP-SP)=variance
Materials quantity variance formula
SP(AQ-SQ)
labour rate variance
AH(AR-SR)
labour efficiency variance
SR(AH-SH)
variable overhead spending variance
AH(AR-SR)
variable overhead efficiency variance
SR(AH-SH)
relevant cost
differs among the alternatives under consideration and will be incurred in the future
