ACC 410 Chapter Notes - Chapter 5: Resource Consumption, Earnings Before Interest And Taxes, Deutsche Luft Hansa
14 May 2011
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Document Summary
This chapter introduces students to activity-based costing (abc) which is a tool that has been embraced by a wide variety of service, manufacturing, and non-profit organizations. Abc is a costing method that is designed to provide managers with cost information for strategic and other decisions that potentially affect capacity and therefore fixed as well as variable costs. It is ordinarily used as a supplement to, rather than as a replacement for, the company"s usual costing system. Some abc systems are used as replacements for a company"s regular costing system and are used for external as well as for internal financial reports. However, in most cases, a company"s abc system is not integrated into the company"s regular costing system. We tend to agree with experts who argue against integrating the two systems because of their very different purposes. The text will emphasize the use of activity-based costing as a decision-making tool: the abc approach taken in the chapter.
