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Identifying the activities and identification of cost drivers
Identifying the activities and identification of cost drivers
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Activity-based budgeting is a technique that focuses on costs of activities or cost drivers necessary for production and sales. Such an approach facilitates continuous improvement.
Activity-based budgeting is a technique that focuses on costs of activities or cost drivers necessary for production and sales. Such an approach facilitates continuous improvement.
a factor that determines the cost of an activity. Cost drivers are analyzed as part of activity based costing and can be used in continuous improvement programs. They are usually assessed together as multiple drivers rather than singly. There are two main types of cost driver: the first is a resource driver, which refers to the contribution of the quantity of resources used to the cost of an activity; the second is an activity driver, which refers to the costs incurred by the activities required to complete a particular task or project.
False. Activity-based costing is used to allocate indirect cost into direct costs.Regardng direct cost, traditional costing is as appropriate as activity-based costing.
Volume based drivers are cost drivers which relates to the things like no. of units made, direct labout cost and number of direct labour costs etc and is similar to the tpe of cost driver for unit-related activities
Cost drivers are the actual activities due to which costs incurres like machine setup cost. As many time there is machine setup as many times there is machine setup cost to be incurred.
Cost drivers are activities due to which cost incurred for expample as many time as machines are setup for production as many time machine setup cost will be incurred so matchine setup is cost driver.
Activity based accounting is a process in which factory overhead cost is allocated to different departments based on activity performed by those departments rather based on any predetermined rate.
Don R. Hansen has written: 'Cost management' -- subject(s): Activity-based accounting, Activity-based costing, Cost accounting, Managerial accounting