What is the first step in designing an Activity-Based Costing (ABC) system? Calculate activity rates Select a small number of activities Interview managers Combine related activities

Select a small number of activities

How is the Traditional Predetermined Overhead Rate (POHR) calculated? Estimated MOH / Estimated allocation Actual MOH / Actual allocation Estimated MOH / Actual allocation Actual MOH / Estimated allocation

Estimated MOH / Estimated allocation

Activity-Based Costing Systems: Implementation, Calculation Methods, and Traditional Comparisons

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Sociology - Management

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Cards in this deck(59)

Which costing method uses a number of allocation bases to assign costs to products?

What type of activities are done each time a unit is produced and should be proportional to the number of units produced?

Tasks performed each time a batch is processed, with costs depending on the number of batches done, are known as what?

Activities that relate to specific products and must be carried out regardless of the number of batches or units made are called what?

What type of activities are carried out regardless of products or output, such as overhead costs and management salaries?

What is the first step in designing an Activity-Based Costing (ABC) system?

How is the Traditional Predetermined Overhead Rate (POHR) calculated?

How is applied manufacturing overhead calculated using the POHR?

In traditional costing, how is the unit product cost calculated using direct labor hours?

What is the formula for calculating the total product cost?

How is the ABC activity rate calculated?

How is ABC applied overhead calculated?

In ABC costing, how is the unit product cost calculated?

What is the main difference between ABC and traditional costing methods?

What happens to overhead costs when implementing ABC in terms of product volume?

What is the purpose of targeting process improvements in ABC?

What are the steps to compute POHR and apply overhead under the traditional method?

What are some benefits of using ABC?

What are some limitations of ABC?

When should process costing be used in a company?

What is the flow of costs in process costing?

What is the journal entry for using raw materials in process costing?

What is the journal entry to record labor in process costing?

What is the journal entry to apply manufacturing overhead in process costing?

What is the journal entry for actual manufacturing overhead in process costing?

What is the journal entry to transfer costs from WIP department A to B?

What is the journal entry to transfer costs from WIP department B to Finished Goods?

What is the journal entry to record the final sale in process costing?

How do you calculate the equivalent units of production (Eu of P)?

How do you calculate the equivalent units in ending WIP?

How do you calculate the cost per equivalent unit?

How do you calculate the cost of ending WIP?

How do you calculate the cost of units transferred out?

How do you calculate the units transferred to the next department?

What is cost reconciliation in process costing?

What does CVP stand for in financial analysis?

What are the assumptions of Cost Volume Profit (CVP) analysis?

What is the structure of a Contribution Income Statement?

How do you calculate the contribution margin (CM)?

How do you calculate net operating income (NOI) or profit?

What is the profit equation in CVP analysis?

What remains constant in CVP analysis regarding per unit price and variable expenses?

How is CVP per unit sales calculated?

How is the contribution margin ratio (CM Ratio) calculated?

How do you calculate changes in net operating income (NOI)?

How do you calculate break-even in unit sales?

How do you calculate break-even in dollar sales?

How do you calculate target profit in unit sales?

How do you calculate target profit in dollar sales?

How do you calculate the margin of safety in dollars?

How do you calculate the margin of safety percentage?

How do you calculate the margin of safety in units?

What does cost structure refer to in an organization?

What is the benefit of having a low fixed cost structure?

What does a high degree of operating leverage (DOL) indicate?

What does the degree of operating leverage measure?

How should sales commissions be structured to align with contribution margin?

How is the degree of operating leverage applied to a percentage increase in sales?

How is the degree of operating leverage calculated?

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