(WIP) ACC 350 Exam 1 Study Material
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29. Steps:<br />
Pg. 20<br />
Sarah Allison Takash<br />
<strong>ACC</strong> <strong>350</strong>, Spring 2018<br />
<strong>Exam</strong> 1 <strong>Study</strong> <strong>Material</strong><br />
a. Determine the total budgeted indirect costs for an activity/indirect cost-pool<br />
b. Determine the total budgeted quantity of the activity’s cost-allocation base<br />
c. Divide step (a) by step (c):<br />
i. total budgeted indirect costs for an activity/indirect cost-pool<br />
total budgeted quantity of the activity’s cost-allocation base<br />
Assigning activity costs to goods & services<br />
Summary:<br />
Take the cost-driver rate (budgeted indirect cost rate) and multiply it by the quantity of costallocation<br />
base that the individual product or service consumes.<br />
30. Steps:<br />
Calculating product cost using the traditional<br />
approach<br />
Summary:<br />
Refer to (#18) “Traditional costing” definition. Simply divide total indirect costs (a single pool)<br />
by one single budgeted cost-allocation base. Use this rate to determine product costs by multiplying<br />
the rate by the amount of cost-allocation base consumed by the particular product.<br />
Calculating product cost using ABC<br />
Summary:
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