Nov 23, 2024
HEP 456 Module 5 Section 12 and 13 Planning for Analysis and Interpretation and Gantt chartĀ
HEP 456 Module 5 Section 12 and 13 Planning for Analysis and Interpretation and Gantt chartĀ Name HEP 456: ā¦
ACC640 Week 2 Discussion Forum 1 Costing
The intangibles that make up cost objects are “cost objects.” They may be anything that management chooses to assess the cost of, such as a product in a manufacturing firm or a service for a retail business.
The term “cost driver” refers to any element contributing to a change in the total cost of an activity. A product can have more than one factor influencing its prices. An illustration of this would be when manufacturing activity is allotted the machine hours and the amount of electricity used.
When separate expenses are brought together, it results in the creation of cost pools. For instance, the expenditures associated with the initial setup of a manufacturing machine would go under the category of “cost pools,” whereas the items that the device would ultimately produce would fall under the category of “cost objects.”
Horngren explains that different cost drivers may be used with various cost hierarchies to classify distinct cost pools. Therefore, a cost hierarchy may be utilized for evaluating and estimating costs since all expenses are broken down into specific levels, and a separate cost driver is found for each level of expenditure. In other words, a cost hierarchy breaks down costs into groups.
The various cost drivers are considered while creating cost hierarchies, which are then used in classifying cost pools. Expenses at the output unit level, costs at the batch level, costs associated with maintaining the product, and costs associated with maintaining the facility are the most typical levels employed. Each expense is placed into one of these categories to provide managers with a tool that will assist them in locating costs and will also assist in improving decision-making.
Reference
Knox, B. D. (2021). Machine Learning Activity-Based Costing: Conceptual Test.Ā Available At SSRN 3965495.
Elshaer, A. M. (2022). Analysis Of Restaurants' Operations Using Time-Driven Activity-Based Costing (TDABC): Case Study.Ā Journal Of Quality Assurance In Hospitality & Tourism,Ā 23(1), 32-55.
