Write substantive post in response to one of the Chapter 4 Practice Questions on page 185 of the eBook/textbook. Simply try to put a different
Write substantive post in response to one of the Chapter 4 Practice Questions on page 185 of the eBook/textbook. Simply try to put a different spin on it. Be sure to write which Chapter 4 Question responding to.
QUESTIONS 1. What is the difference between a volume-based cost driver and a non-volumebased cost driver? 2. Explain the statement that traditional costing systems use volume-based allocation measures. 3. What are the potential negative consequences of a traditional volumebased costing system? 4. How does activity-based costing differ from traditional costing systems? 5. What types of business might use activity-based costing? 6. Describe the two stages of activitybased costing. 7. Identify the categories (hierarchy) of activities in an activitybased costing system for a manufacturing company. 8. How do the ABC categories (hierarchy) in a service company differ from those in a manufacturing company? 9. Why must costs be classied into different categories for ABC? What is the basis for these categories? 10. Consider a construction company that builds semicustom homes. Give an example of each of the following activities: facility level, product level, batch level, and unit level. 11. Consider a company that offers drivers' education and defensive driving courses. Give an example of each ofthe following activities: customer level, group level, service level, company or facility level. 12. Explain the difference between the activityrate method and the activityproportion method of ABC. Page 135 13. Dene activitybased management and explain how it is related to activitybased costing. 14. How can ABC be adapted to include sustainabilityrelated metrics? Give an example of an environmental performance measure that could be tracked by an ABC system. 15. What is benchmarking? How does it benet a company? 16. What is a nonvalueadded activity? Considering the construction company in question 10, give an example ofa valueadded and a non- valueadded activity. 17. What are the four types of quality costs that comprise total quality management (TQM)? 18. What is target costing? How does activitybased management play a role in target costing? 19. Explain the concept of a justintime inventory system. What is its primary benet? 20. Briey discuss the advantages and disadvantages of activitybased costing and activity-based management
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