CHAPTER LEARNING OBJECTIVES
After studying this chapter, you should be able to:
1. Recognize the difference between traditional costing and activity-based costing.
2. Identify the steps in the development of an activity-based costing system.
3. Know how companies identify the activity cost pools used in activity-based costing.
4. Know how companies identify and use the activity cost drivers in activity-based costing.
5. Understand the benefits and limitations of activity-based costing.
6. Differentiate between value-added and non-value-added activities.
7. Understand the value of using activity levels in activity-based costing.
8. Apply activity-based costing to service industries.
*9. Explain just-in-time (JIT) processing.
*Note: All asterisked (*) items relate to material contained in the Appendix to the chapter.
PREVIEW OF CHAPTER 17
Traditional costing systems are not the best answer for every company. Sometimes a traditional system can mask significant differences in its real cost structure. New management tools have been developed that allow businesses to gather more accurate data for decision-making purposes, including activity-based costing (ABC). The content and organization of this chapter are as follows:
Traditional Costing And Activity-Based Costing