BUS 254 Lecture Notes - Lecture 4: Activity-Based Costing, Cost Driver, European Cooperation In Science And Technology

• School: Simon Fraser University
• Department: Business Administration
• Course: BUS 254
• Professor: Michael Favere-Marchesi

Document Summary

We can use a single overhead poh rate (based on dhl) Products consume activities and activities consume resources. Consume resources of the enterprise, adding to oh cost. Abc allocates oh costs to several activity cost pools. Assigns cost pools to products using cost drivers that represent activities used. Packaging products: assign moh to identified activity cost pools. /box: calculate abc rates, allocating oh to product a based on usage. per setup - 5 setups - 100. Compare all 3 methods of assigning moh to products. A company has 2 products a and b and uses dlh to allocate moh to the products. Dlh a = 10, 000 b=10, 000. Dl is doubled per unit in b. Dm + dl + moh = unit costs. 30,000 mh x . 50 a = , 000 b = ,000. ,000 budgeted moh can be broken down into the following activities (with related cost drivers): Activity 3: , 000 (+ 10 eng. changes)