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|Cost drivers and cost pools
|Identification and selection of cost drivers and cost pools in an ABC system.
|Analyzing activities within an organization and determining their costs.
|Overhead cost allocation
|Allocation of overhead costs to specific activities using methods such as direct allocation, step-down allocation, and reciprocal allocation.
|Categorizing costs into different levels (output unit-level, batch-level, product-level, facility-level) based on the cost hierarchy.
|Cost allocation and activity rates
|Calculation of activity rates for cost allocation purposes and applying them to allocate costs.
|Using ABC for decision-making and performance measurement, analyzing the profitability of products, customers, or processes.
|Discussing challenges faced during ABC system implementation, including resistance to change, data collection difficulties, etc.
|Comparison with traditional costing methods
|Comparing ABC with traditional costing methods like job costing and process costing, highlighting advantages and limitations.