MGT223H5 Chapter Notes - Chapter 5: Indian Railways, Expense, Computer Network
Document Summary
Most firm usually have official costing system for external financial reports and activity based for internal decision making. Traditional cost accounting = only manufacturing costs assigned to products (selling, general and administration expenses = period expenses and not assigned to product). In abc, products assigned all overhead costs (non manufacturing + manufacturing) Overhead = non manufacturing costs as well as indirect manufacturing costs. Cost assigned to product only if good reason to believe that cost would be affected by decisions concerning product costs that are unaffected by product related decisions = period expenses instead of product costs. Activity: event that causes consumption of overhead resources. Activity cost pool: a bucket in which costs are accumulated that relate to a single activity measure in activity based costing system. : simple count of number of times an activity occurs measure of amount of time required to perform an activity.
