BUSI 601 Chapter Notes - Chapter 5: Activity-Based Costing, Resource Consumption, Business Process
12 Sep 2016
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Chapter 5: activity based costing and customer profitability analysis. Activity based costing: method for improving the accuracy of cost determination, a costing approach that assigns resource costs to cost objects based on activities performed for the cost objects. Steps (3: identifying resource costs and activities, assigning resource costs to activities, assigning activity costs to cost objects, benefits (5, better profitability measures, better decision making, process improvement, improved planning, cost of unused capacity. Activity: a specific task, action, or unit of work done, often listed in an activity dictionary. Resource: an economic element applied or used to perform activities. Cost driver: a factor that causes or relates to a change in the cost of an activity, types (2, resource consumption. A measure of the amount of resources consumed by an activity: activity consumption. A measure of the demand placed on the resources by products, services, or.
