6

Activity-based Costing (Cost Allocation) System

LEARNING OBJECTIVES

After studying this chapter you should be able to:

  1. Understand the meaning and definition of activity-based costing system.

  2. Know the important terms associated with activity-based costing system.

  3. Explain the features and significance of activity-based costing system.

  4. Understand the steps involved in the implementation of this system.

  5. Differentiate between traditional costing system and the activity-based costing system.

  6. Identify and select cost-allocation bases to use for allocation of indirect costs to the products.

  7. Compute cost per unit of the product using activity-based costing system for absorption of overhead costs.

  8. Explain all the significant key terms in respect ...

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