AccountingCode 9706
Activity based costing
What this topic asks you to be able to do
- how activity based costing (ABC) is applied
- what ABC is used for and what its limitations are
- the meaning of the term cost driver
- the way ABC is applied to: pinpoint the right cost driver; apportion and allocate overheads; work out the overall cost of a unit and its selling price
- the impact that alternative overhead absorption approaches have on cost and profit
- the way to employ ABC costing techniques when reaching business decisions and recommendations from supporting data