Absorption, Variable, and Activity Based Costing
Activity Based Costing
Continuing the scenario from the Module 2 discussion, think about the costs to manufacture your product. Review the concepts of activity based costing.
- If you implemented activity based costing for your division, what additional costs would you consider as manufacturing costs? How would you allocate those costs to your division?
- Would activity based costing give you a more or less realistic picture of your divisions costs incurred to produce revenue?
- If you chose to not fully implement activity based costing, what would you have learned about your department’s costs that would help you operate more profitably?