MBAA-102 Accounting for Managers – Unit 7

MBAA-102 Accounting for Managers – Unit 7

Objectives: Understand the concept of Activity Based Costing (ABC) and its objectives and features; Identify the difference between Traditional Costing and ABC; Comprehend the usages of ABC; Recognise the Cost drivers and their types and Understand other related terms to ABC.

Materials:
The relevant material is available here.

Questions:

1. What is Activity-Based Costing (ABC)? What is its need?
2. What are the benefits of activity-based costing?
3. Define cost driver? What are the roles of cost drivers?
4. Distinguish between activity-based costing and traditional costing systems.
5. What are the limitations of ABC?