Traditional Cost Accounting Vs. Activity-Based Costing
Traditional Cost Accounting Vs. Activity-Based Costing
Traditional Cost Accounting
Categories in Department
Budget
Wages & Salaries $350,000
Employee Benefits 115,000
Supplies 6,500
Travel 2,400
Depreciation 17,000
Other Fixed Charges 124,000
Miscellaneous
Operating Expenses 25,520
$640,150
$135,750
82,100
23,500
15,840
94,300
48,450
110,000
130,210
$640,150
Departmental Activities
Using Activity-Based
Cost Accounting
Evaluate Suppliers
Process Purchase Orders
Expedite Deliveries
Expedite Internal Process
Check Item Quality
Check Deliveries Against
Purchase Orders
Resolve Problems
Internal Administration