文档介绍：Activity Based Costing: A Tool to Aid Decision Making Chapter8 Activity Based Costing (ABC) The objective of activity-based costing is to understand overhead and the profitability of products and customers. ABC is a good supplement to our traditional cost system I agree! Overhead rates may be based on activity at capacity. Activity Based Costing (ABC) Activity-Based Costing Both manufacturing and nonmanufacturing costs may be assigned to products. Some manufacturing costs may be excluded from product costs. There are a number of cost pools each of which is allocated using a unique measure of activity. Allocation bases often differ from traditional costing systems. How Costs are Treated Under Activity-Based Costing Level plexity Overhead Allocation Plantwide Overhead Rate Departmental Overhead Rates Activity Based Costing Plantwide Overhead Rate Companies tend to use direct labor as the overhead allocation base. A two stage process is necessary because costs are allocated to departments and then to products. Finishing Department Shipping Department Painting Department Departmental Overhead Rates Department 1 Department 2 Department 3 Cost pools Indirect Labor Indirect Materials Other Overhead Stage One: Costs assigned to pools Departmental Overhead Rates Department 1 Department 2 Department 3 Cost pools Stage One: Costs assigned to pools Products Stage Two: Costs applied to products Departmental Overhead Rates Indirect Labor Indirect Materials Other Overhead Department 1 Department 2 Department 3 Cost pools Stage One: Costs assigned to pools Products Stage Two: Costs applied to products Direct Labor Hours Machine Hours Raw Materials Cost Departmental Allocation Bases Departmental Overhead Rates Indirect Labor Indirect Materials Other Overhead Designing an ABC System Cost Objects (., products and customers) Activities Consumption of Resources Cost