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Janice is about to order her coffee after waiting in line for 15 minutes when a stranger walks up and asks if she can order ahead of Janice since she has an appointment in five minutes. Janice lets the stranger place her order first. Janice has just exhibited
Activity Cost Pools
A method in managerial accounting used to allocate indirect costs to products or services based on specific activities that drive costs.
Activity-Based Costing
An accounting method that identifies the activities a firm performs and assigns costs to products and services based on the actual consumption of resources.
Total Overhead Cost
The sum of all indirect costs of manufacturing or providing services that are not directly tied to a specific product or job.
Activity Rate
This refers to the cost driver rate used in activity-based costing to allocate costs to products or services based on the activities that those products or services require.
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