ACCT2320 - 5.1 - 5.4

ABC means

ABC

• - allocated overhead based on multiple _

ABC

• - assigns costs based on what drives the _

Ex: allocation bases

manufacturing department based on _

Ex: allocation bases

assembly department based on _

4 steps of ABC

1) Identify "_" - that your company undertakes and the estimated overhead costs for each of these

Hierarchy of activity levels:

machine-related

labour-related

• Unit level activities

• Facility level activities

• Batch level activities

• Product level activities

Hierarchy of activity levels:

equipment set ups

purchase ordering

inspection

material handling

• Unit level activities

• Facility level activities

• Batch level activities

• Product level activities

Hierarchy of activity levels:

product design

engineering design

• Unit level activities

• Facility level activities

• Batch level activities

• Product level activities

Hierarchy of activity levels:

factory management salaries

factory depreciation

property taxes

utilities

• Unit level activities

• Facility level activities

• Batch level activities

• Product level activities