BUS 082 Chapter Notes - Chapter 14: Budget Process, Event Management, Activity-Based Costing

• School: College of The Sequoias
• Department: Business (BUS)
• Course: BUS 082
• Professor: Porterfield

Document Summary

Overhead will consist of job order or process costs. Classify between direct labour, direct materials or indirect costs. Overhead rate x activity base is then allocated to work process or each job. Depending on which cost driver is used, different cost for each job. Direct materials and labour amounts will be added. Traditional use one overhead cost pool and calculate using volume-based. What happens with different departments, locations, processes. E. g. rent 20% for marketing department 70% for shipping 10% for production. Specific overheads to allocate per department and a cost driver for each. E. g. shipping km shipped, storing cm3, production machine hours. More accurate figure, allocated based on true areas/departments of a business. Better for management (just overheads in your department) A business plan for the short term. How to finance in order to reach a goal. Can compare actual outcomes to plans and ensure the business will get back on track if don"t meet planned outcomes.