Accounting Information Systems

10th Edition
Hall + 1 other
Publisher: Cengage Learning,
ISBN: 9781337619202



Accounting Information Systems

10th Edition
Hall + 1 other
Publisher: Cengage Learning,
ISBN: 9781337619202
Chapter 7, Problem 17DQ
Textbook Problem

Discuss the disadvantages of activity-based costing.

To determine

Enlist some of the disadvantages of activity-based costing.

Explanation of Solution

Activity Based Costing:

The approach of activity based costing keeps the record of resources usage by operating activities and cost incurred for such activities. Managers can take effective and right decision with the help of activity based costing.

Lean manufacturing organizations uses activity based costing technique as it helps them to maximize output by using limited resources in an effective and efficient manner.

Apart from holding so many pros there are some cons which are also associated with activity based costing. These can be briefed as follows:

  • Expensive: Activity based costing involves additional set of activities which need to perform in allocating cost situated to a particular activity. Performing such additional activities leads to incurring additional expenditure by organization...

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Chapter 7 Solutions

Accounting Information Systems
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Ch. 7 - What functions should be separated to segregate...Ch. 7 - Give an example for each of the following control...Ch. 7 - Distinguish between computer-aided design and...Ch. 7 - What is meant by the statement Inventories...Ch. 7 - What are the primary goals of lean manufacturing?Ch. 7 - Distinguish between activities and cost objects in...Ch. 7 - Differentiate between essential and nonessential...Ch. 7 - What is meant by the term islands of technology?Ch. 7 - Define computer-integrated manufacturing.Ch. 7 - Define the term value stream.Ch. 7 - Discuss the importance of the move ticket to the...Ch. 7 - How realistic are the assumptions of the economic...Ch. 7 - Explain why the economic order quantity is the...Ch. 7 - Supervisors in the work centers oversee the usage...Ch. 7 - Explain how prenumbered documents help to provide...Ch. 7 - What role does the general ledger department play...Ch. 7 - Describe the characteristics of a world-class...Ch. 7 - How does automation help achieve manufacturing...Ch. 7 - Identify three areas where the consumer directly...Ch. 7 - How can poor quality be expensive to the firm,...Ch. 7 - Discuss how an emphasis on financial performance...Ch. 7 - How can activity-based costing be used to switch...Ch. 7 - How are cost structures fundamentally different...Ch. 7 - How can a firm control against excessive...Ch. 7 - What is a value stream map?Ch. 7 - Discuss the advantages of activity-based costing.Ch. 7 - Discuss the disadvantages of activity-based...Ch. 7 - Explain why traditional cost allocation methods...Ch. 7 - Explain the concept of a product family and its...Ch. 7 - Explain the relationship between MRP II and ERP.Ch. 7 - Which of the following descriptions is not...Ch. 7 - Which of the following is NOT a problem associated...Ch. 7 - Which of the following is NOT a principle of lean...Ch. 7 - Which line segment represents the reorder lead...Ch. 7 - Which line segment represents the demand? a. DE b....Ch. 7 - Which statement describes the evolution of...Ch. 7 - Which of the following statements regarding...Ch. 7 - Refer to the equation for the EOQ in the text. Car...Ch. 7 - DOCUMENT FLOWCHART Prepare a flowchart that...Ch. 7 - ECONOMIC ORDER QUANTITY Generators R Us (GRU) is a...Ch. 7 - WORLD-CLASS COMPANIES Conduct an online search...Ch. 7 - INTERNAL CONTROL Examine the flowchart for Problem...Ch. 7 - DESIGN AND DOCUMENT MANUFACTURING PROCESSES Design...Ch. 7 - ZERO DEFECTS PROCESS Northern Tractor is a...Ch. 7 - ACTIVITY DRIVERS Cut It Up, Inc., is a...Ch. 7 - LEAN MANUFACTURING PRINCIPLES Write an essay...Ch. 7 - Internal Control Cases UTICA LIGHTING COMPANY...Ch. 7 - LAWN WIZARD INC. (MANUAL SYSTEM WITH STAND-ALONE...Ch. 7 - TRIUMPH AUTOMOTIVE ELECTRONICS (CENTRALIZED SYSTEM...Ch. 7 - AJAX MANUFACTURING INC. (CENTRALIZED SYSTEM WITH...

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