Some costs are difficult to assign through this method of cost accounting. Indirect costs, such as management and office staff salaries are sometimes difficult to assign to a particular product produced. For this reason, this method has found its niche in the manufacturing sector.

Research the Internet and discuss Activity-Based Costing.

-Explain what it is and how it differs from Job costing.

-Explain why “true” product costs have only minor importance in final market price determination.

-Define and give an example of a “cost object”, “activity” and “resources.”

-Define “cost driver” and give 4 examples of activity cost pools and an appropriate cost driver for each.