Contents
What is volume based costing?
A volume-based allocation is an allocation of factory overhead costs based on a unit of activity, rather than a cost. Examples of such allocation bases are: Amount of square footage used. Number of labor hours used.
What is the synonym of cost?
In this page you can discover 77 synonyms, antonyms, idiomatic expressions, and related words for cost, like: expense, price, charge, value, be paid, be, payment, harm, detriment, loss and pain.
How does a traditional volume based costing system operate?
Traditional costing is the allocation of factory overhead to products based on the volume of production resources consumed. Under this method, overhead is usually applied based on either the amount of direct labor hours consumed or machine hours used.
What are the three costing methods?
The main costing methods available are process costing, job costing and direct costing. Each of these methods apply to different production and decision environments.
What is volume-based system?
Traditional product costing system is also referred to as functional-based cost accounting system or volume-based costing system. In this costing system, overheads are charged to products on a production volume related basis such as direct labour hours, direct labour cost, and machine hours.
Is traditional costing the same as volume-based costing?
Traditional costing is more simplistic and less accurate than ABC, and typically assigns overhead costs to products based on an arbitrary average rate. ABC is more complex and more accurate than traditional costing.
What caused synonym?
In this page you can discover 42 synonyms, antonyms, idiomatic expressions, and related words for caused, like: triggered, made, purposed, cased, stirred, induced, stimulated, secured, occasioned, generated and brought.
What’s another word for cost effective?
Find another word for cost-effective. In this page you can discover 26 synonyms, antonyms, idiomatic expressions, and related words for cost-effective, like: economical, low-cost, cost-efficient, thrifty, , environmentally friendly, worthwhile, penny-wise, convenient, frugal and cost-efficiently.
When activity-based costing is used why do manufacturing overhead costs often shift from high volume products to low volume products?
f) Determine the amount of overhead applied using activity based costing if the initial production run was 10% of annual volume. Activity-based costing often shifts overhead cost from high-volume products to low volume products. The reason: batch-level and product-level costs.
What are three advantages of activity-based costing over traditional volume?
What are three advantages of activity-based costing over traditional volume-based allocation methods? More accurate product costing, more effective cost control, and better focus on the relevant factors for decision making.
What are the types of costing systems?
Production costing
- Job Costing.
- Standard Costing.
- ABC Costing.
- Direct Costing.
- Target Costing.
- Process Costing.
What are costing systems?
A costing system is designed to monitor the costs incurred by a business. The system is comprised of a set of forms, processes, controls, and reports that are designed to aggregate and report to management about revenues, costs, and profitability.
What is a volume based cost accounting system?
Traditional product costing system is also referred to as functional-based cost accounting system or volume-based costing system.
How are labor costs and overheads related in volume based costing?
With labor costs being a primary manufacturing cost and labor activities being the major activity in the manufacture of a product, volume-based costing systems focus on measuring and controlling direct labor costs. Factory overheads are a small fraction of the labor cost and are deemed as resources expended to support labor activities.
What do you mean by activity based costing?
Activity-based costing ABC is a method for assigning costs to products, services projects, tasks, or acquisitions, based on: ABC contrasts with traditional costing ( cost accounting), which sometimes assigns costs using somewhat arbitrary allocation percentages for overhead or the so-called indirect costs.
Why are there distortions in volume based cost data?
Users of traditional volume-based cost data who are aware of likely distortions in cost data from a volume-based costing system, often attempt to make intuitive, and likely, imprecise adjustments to the volume-based cost information without understanding their complete effect and, thereby, distort the cost information further.