Key Terms: Chapter Twenty
Alternative costing method for strategic management; divides production into activities, defines costs for activities, and allocates costs to objects based on activity consumption
An event that gives rise to the consumption of resources
The costs assigned to a particular activity
Event that causes consumption of an activity
Activities that relate to each batch of production; independent of the number of units within that batch
The output for which costing information is to be determined under ABC; can be product or service related, or customer, market, etc.
A report used in a process costing environment to tabulate the costs incurred within a particular stage/department
Activities that relate to each customer; independent of the volume of goods and services provided to the specific customer
Activities that relate to an entity's ability to operate; independent of business volume
A measure of physical units expressed in terms of finished units
Activities that relate to the number of markets in which an entity operates; independent of the number of products, customers, etc.
Process costing is a method to allocate the total costs of production to homogenous units produced via a continuous process that usually involves multiple steps or departments
Activities that relate to the number of products produced; independent of the number of units produced
The elements consumed by activities and cost objects
The concept that activities create the need for resources which will be consumed in the production process
Activities that relate to the number of units of output; each additional unit of production requires another activity
weighted-average process costing
A process costing technique where all units of production are assigned the same cost; determined by blending of current period costs with beginning inventory cost