ACC 252 Lecture Notes - Lecture 3: Activity-Based Costing, Cost Driver, Abc Comedy
17 Aug 2016
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Document Summary
Summarizing manufacturing transactions using journal entries and t- accounts. Evaluating the positions of overhead allocation methods. Typically, a significant portion of a product"s unit cost is derived from its proportional share of manufacturing overhead. A company"s product offering strategy direct impacts its cost structure. A company that sells less products has an advantage b/c its cost structure is less complicated. Oh per unit (based on direct labor hr) Predetermined overhead rate = total estimated manufacturing overhead. Total estimated manufacturing overhead: assumes every product made in the factory incurs every cost evenly, no matter what type of overhead it is used. Total estimated cost driver: assumes every cost incurred is due to one cost driver. Overhead as more than a list of costs. Managers see what they"re doing/how they"re spending money and classify costs from there. Activity drivers: all the little parts that make up manufacturing. Activity based costing goes beyond traditional volume based allocation.
