Traditional Overhead Allocation and Activity Based Costing, Cost Accounting

The controller for U.S. Route 66 Truck Parts is comparing traditional overhead allocationwith ABC. After studying both approaches, the controller prepared the following list of features and attributes of the two methods.

Required: Label each the listed items as either belonging to traditional overhead allocation (TOA) or activity-based costing (ABC).

1. More complex system

2. Does not aid in cost reduction

3. Uses only a few cost pools

4. Uses several allocation bases

5. Is expensive to implement

6. Probably accurate enough for the company as a whole

7. Correlative relationship exists between allocation base and cost

8. Casual relationship exists between allocation base and cost

9. Uses many cost pools

10. Not very accurate on a product by product cost level

Posted Date: 3/20/2013 4:03:25 AM | Location : United States







Related Discussions:- Traditional Overhead Allocation and Activity Based Costing, Assignment Help, Ask Question on Traditional Overhead Allocation and Activity Based Costing, Get Answer, Expert's Help, Traditional Overhead Allocation and Activity Based Costing Discussions

Write discussion on Traditional Overhead Allocation and Activity Based Costing
Your posts are moderated
Related Questions
Methods of Labour Remuneration There Labour remuneration methods can be broadly classified into two factors as: i. Time rate or on the basis of the time spend in the factor

A corporation acquired a truck on July 1, 2012, at a cost of $162,000. The truck has a six-year useful life and an estimated salvage value of $18,000. The straight-line method of d

Stores layout and location - Material Handling The layout of stores must ensure as a) For movement of material, ease of access out and in of stores b) The issue of peris

Hello, I am writing a report about a contemporary management accounting issue, and i can''t really seem to understand the guidelines well. What kind of topic can i use to write a

Question Roseville, Ltd., sells one of its products for $500 each. Sales volume averages 1,000 units per year. Recently, its main competitor priced their competing product at 1


The Federal Reserve adjusts short term interest rates based upon their perceptions of the needs in the economy.  Please describe the ways the Federal Reserve can influence interest

Accounts Payable or sundry creditors are generally unsecured debts owed through the firm. These are also considered to as payables on open accounts. They may not be evidenced throu

7. The Isabelle Corporation rents prom dresses in its stores across the southern United States. It has just issued a five-year, zero-coupon corporate bond at a price of $74. You ha

Labour Variances From our basic data, we can calculate the labour variances as given as: i. Labour Rate Variance = (AH x AR) - (AH  x SR)