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Business LibreTexts

4.2: Chapter 4 Study Plan

  • Page ID
    26053
  • Study Plan: Activity Based Costing

    Knowledge Targets

    I can define the following terms as they relate to our unit:

    Cost Driver

    Cost Pool

    Product Margin

    Activity Based Costing

    Customer Margin Activity Rate

    Plantwide rate

    Departmental rate

    Allocation Base Cost per Unit

    Reasoning Targets

    • I can explain the use of cost pools in activity based costing.
    • I can analyze the product margin of a product when using activity based costing and plantwide allocation.
    • I can understand the difference between plantwide rate, departmental rate, and activity based costing activity rate.
    • I can analyze the customer margin of a product using activity based costing.

    Skill Targets

    • I can calculate activity rates for activity cost pools.
    • I can calculate the product margin using a traditional costing system and activity based costing.
    • I can allocate overhead using activity based costing activity rates.
    • I can allocate overhead using plantwide rates and departmental rates.
    • I can calculate the total cost of a department, job, product, or process using activity based costing.

    Click ABC Costing study plan for a printable copy.