Busy. Please wait.
Log in with Clever

show password
Forgot Password?

Don't have an account?  Sign up 
Sign up using Clever

Username is available taken
show password

Make sure to remember your password. If you forget it there is no way for StudyStack to send you a reset link. You would need to create a new account.
Your email address is only used to allow you to reset your password. See our Privacy Policy and Terms of Service.

Already a StudyStack user? Log In

Reset Password
Enter the associated with your account, and we'll email you a link to reset your password.
Didn't know it?
click below
Knew it?
click below
Don't Know
Remaining cards (0)
Embed Code - If you would like this activity on your web page, copy the script below and paste it into your web page.

  Normal Size     Small Size show me how


Activity based costing

What is ABC? It refines a costing system by identifying individual activities as the dundamental cost objects.
What can broad averaging lead to? It can lead to undercosting or overcosting of products or services.
What is termed as product undercosting? It occurs when a product consumes a HIGH LEVEL of RESOURCES but is reported to have a LOW COST PER UNIT.
What is termed as product overcosting? It occurs when a product consumes a LOW LEVEL of RESOURCES but is reported to have a HIGH COST PER UNIT
What are the strategic consequences of an undercosted product? It will result in product being UNDERPRICED and may even lead to sales that actually result in LOSSES.
Why does undercosted products net a lower profit than projected? It is due to sales bringing in lesser revenue than the cost of resources they use.
What does overcosted products lead to? It leads to overpricing, which cause products to lose market share to competitors producing similar products.
What does a refined costing system result in? It reduces the use of broad averages for assigning the cost of resources to cost objects/
What does a refined costing system provides? It provides better measurement of the costs of indirect resources used by different cost objects.
What is the difference between the design of a simple costing system and an ABC system? The ABC systen differs from the simple system by its fundamental focus on activities. The ABC system has more homogeneous indirect cost pools than the simple system, and more cost drivers are used as cost-allocation base.
When will ABC systems yield the most decision-making benefits? When indirect costs are a high percentage of total costs.
What are the main costs of ABC systems? It is the difficulty of the measurements necessary to implement and update the systems.
How is ABC used for management decision? It is used for pricing, product-mix, cost reduction, process improvement, product and process planning and decision making.
Created by: Malcolm1987
Popular Accounting sets




Use these flashcards to help memorize information. Look at the large card and try to recall what is on the other side. Then click the card to flip it. If you knew the answer, click the green Know box. Otherwise, click the red Don't know box.

When you've placed seven or more cards in the Don't know box, click "retry" to try those cards again.

If you've accidentally put the card in the wrong box, just click on the card to take it out of the box.

You can also use your keyboard to move the cards as follows:

If you are logged in to your account, this website will remember which cards you know and don't know so that they are in the same box the next time you log in.

When you need a break, try one of the other activities listed below the flashcards like Matching, Snowman, or Hungry Bug. Although it may feel like you're playing a game, your brain is still making more connections with the information to help you out.

To see how well you know the information, try the Quiz or Test activity.

Pass complete!
"Know" box contains:
Time elapsed:
restart all cards