ACC 406 Chapter 7: Chapter 7.docx
Document Summary
exhibit 7-1 on pg 299 shows abc hierarchy. Illustrating the failure of plantwide or departmental rates y ex. on pg 300-301. Problems with cost distortion y more on pg 301-302 y cornerstone 7-1 on pg 302. Illustrative example: service firm y answers to the set of key questions identified in pg 307 & exhibit 7-4. Assigning costs to products y example on pg 312-313. Activity-based customer costing and activity-based supplier costing y abc is used to accurately find the costs of suppliers & customers (ex. on pg 314) Activity-based customer costing y more on pg 314-315. Customer costing versus product costing y highlighted on pg 315 y cornerstone 7-5 on pg 316 shows how abc assigns costs to customers. Activity-based supplier costing y highlighted on pg 315. Supplier costing methodology y highlighted on pg 315 y cornerstone 7-6 shows how to use abc for supplier costing.