A “bucket” in which costs are accumulated that relate to a single activity measure in an activity-based costing system.
Activity cost pool
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15
Activities that relate to specific products that must be carried out regardless of how many units are produced and sold or batches run.
Product-level activities
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eraser
Reset score!
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magnet
Take 10 points!
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gift
Win 15 points!
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banana
Go to last place!
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15
A simple count of the number of times an activity occurs.
Transaction driver
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Activities that are performed each time a unit is produced.
Unit-level activities
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Activities that are carried out to support customers, but that are not related to any specific product.
Customer-level activity
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thief
Give points!
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25
magnet
Take 20 points!
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gift
Win 10 points!
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thief
Give points!
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15
A systematic approach to identifying the activities with the greatest potential for improvement.
Benchmarking
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15
Activities that are performed each time a batch of goods is handled or processed, regardless of how many units are in the batch. The amount of resource consumed depends on the # of batches run rather than on the # of units in the batch.
Batch-level activity
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lifesaver
Give 10 points!
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rocket
Go to first place!
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gift
Win 25 points!
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banana
Go to last place!
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15
The process by which activity rates are used to apply costs to products and customers in activity-based costing.
Second-stage allocation
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A measure of the amount of time required to perform an activity.
Duration driver
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monster
Reset all scores!
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fairy
Take points!
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shark
Other team loses 15 points!
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baam
Lose 5 points!
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A costing method based on activities that is designed to provide managers with cost information for strategic and other decisions that potentially affect capacity and therefore fixed as well as variable costs.
Activity-based costing (ABC)
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15
An allocation base in an activity-based costing system; ideally, a measure of the amount of activity that drives the costs in an activity cost pool.
Activity measure
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The process by which overhead costs are assigned to activity cost pools in an activity-based costing system.