What is the cost of the cost of activity?

Activities based on activities is a managerial accounting system that allocates production costs on the basis of production activities. This cost allocation system relies on the driver's cost of the cost of allocating production costs. There are three basic groups of cost drivers: volume, time and driver -based drivers. Manager's accounting checks all manufacturing activities and selects an activity driver that best suits the manufacturing process. The measurement and control process for each cost driver ensures that the company properly allows production costs as best as possible. The overhead costs include indirect materials, depreciation of equipment, non -production salaries and similar costs. In most cases, the cost accounting system will place the total cost of each of these items in one large fund. At the end of the production process, the manager's accounting controller uses the unit based on the unit based on the unit. This process is often quite technical and requires some details to properly intoThey ended. Increasing the cost -based cost -based cost is to increase costs as the company increases production production. An example of a volume -based cost control is the use of direct materials to produce a single type of product. For each unit of the direct material used in the production process, the driver requires the cost of activity at least one unit to allocate the cost of the head. Other volume -based controls work in a similar way.

time -based cost -based drivers use the time to complete the activity to allocate overhead costs. This type of driver's cost driver can use different types of working hours to allocate overhead costs. First, the time required to set up a production or reworking of the device can be one type of time control. Secondly, the number of direct working hours used to produce one unit can also be common tYPEM of the driver. Either of them uses a number of hours spent in a certain activity as a base to allocate overhead costs.

The assignment methods are a little less common than the previous two. Here the cost of the whole activity of directing goes directly against the cost object. For example, depreciation of the device goes to the final product in production activities. In some cases, the final product may not be a good, but simply the middle good that moves to further activities. Either way, the cost -based cost control uses costs at the same time.