Pick one of the questions below. Explain your response in a paragraph or two.
1. A company's performance measure is the number of customer complaints. Why would the company measure the number of customer complaints?
2. A company's performance measure is the percentage of time that machines are not working. Why would the company measure the percentage of time that the machines are not working?
3. What is the difference between activity-based costing and activity-based management?
4. "Activity-based costing is great for manufacturing plants, but does not really address the needs of the service sector." Do you agree with this statement? Explain.
5. What is a cost driver? Give three examples.
6. A drawback to activity-based costing is that it requires more record-keeping and extensive teamwork between all departments. What are the potential benefits of a more detailed product cost system?
7. "Activity-based costing is for accountants and production managers. I plan to be a marketing specialist so ABC will not help me." Do you agree with this statement? Explain.
8. Observe the workings of a food service or coffee house. What activities are being performed? Give examples of some cost drivers that cause the cost of those activities. (For example, cooking food is an activity; the number of meals could be a cost driver for the cooking activity.)
9. Observe the workings of a bank, credit union, or savings and loan institution. What activities are being performed? Give examples of some cost drivers that cause the cost of those activities. (For example, opening checking accounts is an activity; the number of accounts opened could be a cost driver for the opening accounts activity.)
"Activity Based Costing Essay Questions" by Gary E. Ford, ACCT 102 Principles of Accounting, Tompkins Cortland Community College is licensed under CC BY 4.0
1. A company's performance measure is the number of customer complaints. Why would the company measure the number of customer complaints?
2. A company's performance measure is the percentage of time that machines are not working. Why would the company measure the percentage of time that the machines are not working?
3. What is the difference between activity-based costing and activity-based management?
4. "Activity-based costing is great for manufacturing plants, but does not really address the needs of the service sector." Do you agree with this statement? Explain.
5. What is a cost driver? Give three examples.
6. A drawback to activity-based costing is that it requires more record-keeping and extensive teamwork between all departments. What are the potential benefits of a more detailed product cost system?
7. "Activity-based costing is for accountants and production managers. I plan to be a marketing specialist so ABC will not help me." Do you agree with this statement? Explain.
8. Observe the workings of a food service or coffee house. What activities are being performed? Give examples of some cost drivers that cause the cost of those activities. (For example, cooking food is an activity; the number of meals could be a cost driver for the cooking activity.)
9. Observe the workings of a bank, credit union, or savings and loan institution. What activities are being performed? Give examples of some cost drivers that cause the cost of those activities. (For example, opening checking accounts is an activity; the number of accounts opened could be a cost driver for the opening accounts activity.)
"Activity Based Costing Essay Questions" by Gary E. Ford, ACCT 102 Principles of Accounting, Tompkins Cortland Community College is licensed under CC BY 4.0