Flashcards
BUS 371 CH 7 KEY TERMS
Cards in this deck (16)
- 1ActivityAn event that causes the consumption of overhead resources in an organization.
- 2Activity-based costing (ABC)A costing method based on activities that is designed to provide managers with cost information for strategic and other decisions that potentially affect capacity and therefore fixed as well as variable costs.
- 3Activity-based management (ABM)A management approach that focuses on managing activities as a way of eliminating waste and reducing delays and defects.
- 4Activity cost poolA “bucket” in which costs are accumulated that relate to a single activity measure in an activity-based costing system.
- 5Activity measureAn allocation base in an activity-based costing system; ideally, a measure of the amount of activity that drives the costs in an activity cost pool.
- 6Batch-level activitiesActivities that are performed each time a batch of goods is handled or processed, regardless of how many units are in the batch. The amount of resource consumed depends on the number of batches run rather than on the number of units in the batch.
- 7BenchmarkingA systematic approach to identifying the activities with the greatest potential for improvement.
- 8Customer-level activitiesActivities that are carried out to support customers, but that are not related to any specific product.
- 9Duration driverA measure of the amount of time required to perform an activity.
- 10First-stage allocationThe process by which overhead costs are assigned to activity cost pools in an activity-based costing system.
- 11Organization-sustaining activitiesActivities that are carried out regardless of which customers are served, which products are produced, how many batches are run, or how many units are made.
- 12Product-level activitiesActivities that relate to specific products that must be carried out regardless of how many units are produced and sold or batches run.
- 13Second-stage allocationThe process by which activity rates are used to apply costs to products and customers in activity-based costing.
- 14Transaction driverA simple count of the number of times an activity occurs.
- 15Unit-level activitiesActivities that are performed each time a unit is produced.
- 16—