A report showing what costs have been assigned to a cost object, such as a product or customer, and how difficult it would be to adjust the cost if there is a change in activity.
Any event that causes the consumption of overhead resources.
Activity cost pool
A "bucket" in which costs are accumulated that relate to a single activity measure in the activity-based costing system.
An 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; also called a cost driver.
Activity-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 costs.
Activity-based management (ABM)
A management approach that focuses on managing activities as a way of eliminating waste and reducing delays and defects.
Activities that are performed each time a batch of goods is handled or processed, regardless of how many units are in a batch. The amount of resource consumed depends on the number of batches run rather than on the number of units in the batch.
The specific product or service to be costed.
Activities that are carried out to support customers but that are not related to any specific product.
A measure of the amount of time required to perform an activity.
The process by which overhead costs are assigned to activity cost pools in an activity-based costing system.
Activities that are carried out regardless of which customers are serviced, which products are produced, how many batches are run or how many units are made.
Overhead cost pool
A group of overhead cost elements.
Activities that relate to specific products that must be carried out regardless of how many units are produced and sold or batches run.
The process by which activity rates are used to apply costs to products and customers in activity-based costing.
A simple count of the number of times an activity occurs.
Activities that arise as a result of the total volume of goods and services that are produced and that are performed each time a unit is produced.