Acct 226 Week 7 Notes
Acct 226 Week 7 Notes ACCT 226 - 002
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ACCT 226 - 002
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This 1 page Class Notes was uploaded by Madeline Lacman on Sunday October 9, 2016. The Class Notes belongs to ACCT 226 - 002 at University of South Carolina taught by Debbie Huguley Brumbaugh in Spring 2016. Since its upload, it has received 4 views. For similar materials see Introduction to Managerial Accounting in Accounting at University of South Carolina.
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Date Created: 10/09/16
Acct 226 Week 7 Notes Activity-Based Costing and External Reporting Most companies do not use ABC for external reporting because o External reports are less detailed than internal reports o It may be hard to make changes to the company’s accounting system o ABC doesn’t conform to GAAP o Auditors may be suspect of the subjective allocation process based on interviews with employees Remember First stage o Overhead costs are traced to activity cost pools o Usually from interviews with employees with first hand knowledge of activities ABC Limitations Substantial resources required to implement and maintain Desire to fully allocate all costs to products Does not conform to GAAP o 2 costing systems may be needed Resistance to unfamiliar numbers and reports Potential misinterpretation of unfamiliar numbers