LESSON OBJECTIVES
Assessment Criteria 1.3 Calculate costs using appropriate techniques Below are questions pertaining to lesson 3. Please ensure to answer each question correctly. 1. Explain the difference between using traditional overhead absorption costing and using Activity Based Costing (ABC). 2. Which industry is a major user of the Marginal Costing approach for the selling of its tickets/fares? 3. Calculate the Full (Absorption) Cost in the following question:
Nicole Webb
10/1/2016 05:42:56 pm
1)The major difference in approach between absorption costing and activity based costing is that absorption costing just assign the cost to produce a unit to a product unit, while activity based costing detect the exact cost to produce a single unit product. Another difference is that absorption costing equally divides the fixed cost by the number of unit products produced, while activity based costing identifies the exact quantity of fixed cost used to produce a unit product(Bright Hub, 2016).
Nel-licia House
10/2/2016 11:18:26 am
are questions pertaining to lesson 3. Please ensure to answer each question correctly. 10/2/2016 07:30:11 pm
Explain the different between using traditional overhead absorption costing and using activity based costing?
Christopher Cameron
10/2/2016 09:04:59 pm
1) The difference between traditional overhead obsorption and Activity base costing is that activity base costing is a lot more refined where as it looks at similar activities in pools rather than the overheads of the department (Smith-Barrett, 2016).
Taisha Lewis
10/12/2016 11:12:27 pm
1. Traditional costing gives manufacturing overhead based on the volume of a cost driver, such as the amount of direct labor hours needed to produce an item. A cost driver is a factor that causes cost to incur, such as machine hours, direct labor hours and direct material hours. Activity-based costing allocates the costs of manufacturing a product according to the activities needed to produce the item. Managers should understand the advantages and disadvantages of both systems to meet the needs of their business .(Johnson, 2016) Comments are closed.
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