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Chapter 2
Overview
Estimate cost
driver volume
Group costs Calculate OH rate
into cost pools per cost driver
Identify cost ABC Apportion costs
on the basis of
drivers
cost drivers
Target Advanced Costing EMA
costing Methods
Selling price based
on market
competition Throughput
accounting
Target cost
Materials are the only
variable cost
Close gap
Throughput = sales –
materials
TPAR = throughput per hour/operating expenses per hour
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