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Traditional Overhead vs Activity Based Costing Methods
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Traditional Overhead vs Activity Based Costing Methods
Traditional Costing Method
Total Manufacturing Overhead Cost/
Total Direct Labor Hours
Outline
Q2. How do you calculate traditional cost?
Question 4
Quiz 4
Question 5
Question 6
Quiz 1
Question 1
Question 2
Quiz 2
Question 3
Conclusion
2. Argument in favour of Activity-Based Costing Method
Q1: What is Traditional Costing Method?
1. Greater costing accuracy because it assign cost only to the products that require the activity for production.
2. Easy interpretation of cost internal management.
A. Costing systems that assist companies in determining the cost of a product.
B. Calculate manufacturing overhead based on the volume of a cost driver
C, Provides values for the cost of goods sold
D. All of the above.
A. Limitations using traditional volume based methods
1. Outdated costing methods
2. Bad management decisions because it excludes non-manufacturing costs