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waterman7833 waterman7833
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A month ago
A company may use GAAP-based product costing or activity-based costing. List two differences between these two methods.
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Managerial Accounting

Managerial Accounting


Edition: 4th
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brendasantsbrendasants
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1.Under GAAP-based product costing, selling and administrative costs are not allocated
to products. However, under activity-based costing, these costs should be allocated to products if they are incurred to provide resources that are consumed by unit-level, batch-level or product-level activities.
2.Under GAAP-based product costing, a company generally uses a two-step approach
to applying overhead, with first calculating a pre-determined overhead rate and second, applying all overhead to products using the single rate. Under activity-based costing, overhead is applied using a five-step approach, where costs in various cost pools are assigned to cost objects using a rate for each cost pool.
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waterman7833 Author
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A month ago
Good timing, thanks!
jamiebonf99
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Yesterday
Thanks
Jose^2
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2 hours ago
Brilliant ツ
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