Chapter 7 activity based costing and management limitations of functional based cost accounting systems plantwide and departmental rates based on direct labor hours machine hours or other volume based measures have been used for decades to assign overhead costs to products and continue to be used successfully by many organizations however this approach has downsides as it may produce . View notes ch07 outline from acct 460 at black hills state university managerial accounting 2nd edition chapter 7 activity based costing and activity based management i activity based costing a. Chapter 7 activity based costing and management figure 7 4 honeydew company produces two products a high end laptop computer under the label bunsen laptops and an inexpensive desktop computer under the label beaker computers the two products use two overhead activities with the following costs setting up equipment 2000 machining 12000 the controller has collected the expected . Chapter 7 outline activity based costing a tool to aid decision making chapter 7 fall 2016 page 4 1 objective of abc understand activity based costing and how it differs from a traditional costing system assign costs to cost pools using a first stage allocation compute activity rates for cost pools assign costs to a cost object using a second stage allocation. Start studying chapter 7 activity based costing management learn vocabulary terms and more with flashcards games and other study tools