Including Activity-Based Costing Constructs in a Survey of Accounting Course

Activity-based costing (ABC) is currently a widely-used multiple-based costing method that students will likely encounter in the workplace. Coverage of a detailed, broad-based analysis of ABC, while very desirable, is likely... [ view full abstract ]

Activity-based costing (ABC) is currently a widely-used multiple-based costing method that students will likely encounter in the workplace. Coverage of a detailed, broad-based analysis of ABC, while very desirable, is likely not possible for students taking a survey of accounting course (often taken by non-business majors) due to the ever-competing plethora of topics deemed essential in the business curriculum.  However, including at least a brief discussion of the theoretical determinants of ABC in the survey course, as well as a basic analysis of the workings of ABC is essential since accurately determining the cost of a product is often basic to the successful operation of a business. In this paper, an overview of costing a product is first presented, followed by an illustration of the use of ABC.