ACC 312 Midterm: Design ABC Systems
Document Summary
Designing an activity-based costing system: design decisions, in most companies, hundreds or even thousands of different activities cause overhead costs. For example: providing power to run processing equipment would be a unit-level activity, batch-level activities are performed each time a batch is handled or processed, regardless of how many units are in the batch. For example: setting up equipment and shipping customer orders are batch-level activities, product-level activities relate to specific products and must be carried out regardless of how many batches are run or units produced and sold. For example: designing or advertising a product would be a product-level activity, facility-level activities are carried out regardless of which customers are served, which products are produced, how many batches are run, or how many units are made. For example: heating a factory and cleaning executive offices are facility-level activities. (cid:862)in business insights(cid:863) (cid:862)dining in the canyon(cid:863) (cid:894)see page (cid:1005)3(cid:1004)(cid:895) An example of an activity-based costing system design.
