COMMERCE 2AB3 Lecture Notes - Lecture 2: The Monthly, Pickup Truck, Amcor
23 Jan 2018
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Document Summary
Activity cost behavior analysis (classifying costs for the purposes of decision-making) To achieve these objectives, we need to perform activity. Activity cost behavior analysis refers to the process of examining the impact of changes in the level of the activity cost driver on the behavior of the total cost spent on a given activity. The objective of this analysis is to identify the type of cost behavior pattern for each activity cost. Activity cost (i. e. , cost of preforming an activity) Activity cost is the total amount of the resources consumed (or used up) in the process of performing the activity. Cost behavior analysis is the process of finding how the total amount of cost spent on a specific cost item (or activity or cost object) responds (or reacts) to changes in its related activity cost driver. Activity cost-driver (also called activity-index or activity-base or allocation-base):
