$($Slide #$11)$

Activity$-$Based Costing $($ABC$)-$ in Appendix H

Please Note: ABC is in Appendix $H$ at the very end of the textbook

It is NOT a third costing system, but another method of allocating manufacturing overhead.

May be used with either a job order or a process costing system.

Benefits: $(1)$ More product costing with more cost pools, for better management decisions, and $(2)$ improved cost data regarding an activity may lead to reduced costs for that activity

Limitations: $(1)$ to obtain the cost data, and $(2)$ ABC does not eliminate $($i$)$ allocations.

ABC makes managers realize that activities, not products, ultimately determine overall company $(4)$

$(1)$ accurate, $(2)$ expensive, $(3)$ arbitrary, & $(4)$ profitability

$(1)$ accurate, $(2)$ inexpensive, $(3)$ arbitrary, & $(4)$ profitability

$(1)$ accurate, $(2)$ expensive, $(3)$ arbitrary, & $(4)$ success

$(1)$ inaccurate, $(2)$ inexpensive, $(3)$ arbitrary, & $(4)$ profitability