Management and Organizational Studies 3370A/B Chapter Notes - Chapter 7: Activity-Based Costing, Cost Driver, Indian Railways

• School: Western University
• Department: Management and Organizational Studies
• Course: Management and Organizational Studies 3370A/B
• Professor: Barry Hawn

Document Summary

The treatment if costs under the activty based costing model. Non-manufacturing costs and activity-based costing: products are assigned all of the overhead costs (non-manufacturing and manufacturing costs) Instead of assigning the costs of idle capacity to products, in abc, these costs are considered to be period costs that flow through to the income statement as an expense of the current period. Is assigned all costs of resources that are consumed by taking and processing customer orders. Is assigned all costs of resources consumed as a consequence of the number of units produced. Is assigned all costs associated with maintain relations with customers. Is assigned all overhead costs that are not associated with customer orders, product design, production units, or customer relations: mainly consists of organization-sustaining costs and the costs of unused, idle capacity. Step 4 assigning overhead costs to cost objects using the activity rates and activity measures.