Problem
We will be looking at Activity Based Costing (ABC) as well as some time-based simplifications of this method. ABC is covered in 2220 class; it is a method where costs are allocated based on the relevant activities that drive them. The time-based methods come in as simplifications as they can be done with information based on time rather than measuring activity inputs.
In Duration Based Costing, we use the inventory's cycle time as part of our calculations. If you have worked in manufacturing, post an example of the cycle time of an item that you have produced. If you have not, you can look one up on Google/Youtube and post those numbers here.
When I worked in a computer factory, we were expected to assemble a desktop in about 5 minutes. This included installing internal components, external stickers, and burning the operating system onto the machine.