Managerial Accounting: Chapter 4.4 ABM in service company

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5 Terms

1
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How can ABM be used in service companies?

same steps to develop overhead rates that we use for manufacturing companies

2
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Step 1 for ABM being used for service companies:

Identify activities and estimate their total indirect costs

  1. allocate indirect costs to cost objects

3
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Step 2 for ABM used for service companies:

identify and estimate the total quantity for each allocation base for each activity

4
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Step 3 for ABM used for service companies:

compute POHR

5
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Step 4 for ABM used for service companies:

allocate indirect costs to cost objects, applied overhead