ACCT10003 Lecture 3: Lecture 4_online(2)

• School: University of Melbourne
• Department: Accounting
• Course: ACCT10003
• Professor: Freeman

Document Summary

Seminar 4 abc & abm: learning objectives. Describe the two main problems associated with traditional costing. Distinguish between production volume and activity volume. 3: abm: using abc information for management. Chapter 11: self study questions and problems: Traditional product costing systems: although they vary from one business to another they usually include the following features Dm & dl are traced to products. Manufacturing o/h costs are allocated to products using a predetermined o/h rate for the whole plant (or one for each production department) The manufacturing o/h rate is calculated using some measure related to production volume, e. g. machine hours. Non-manufacturing costs are not assigned to products. Traditional product costing systems: these traditional systems tend to aggregate the o/h costs into a very large costs pool, but when selecting an overhead cost driver we should understand. Traditional product costing systems: however most traditional product costing systems assume that manufacturing overhead is driven by the volume of production .