Discussion Board Activity Question Activity Based Costing in the Information Age Activity based costing systems provide a much more accurate picture of product costs than do traditional product costing systems. This exercise focuses on an article presented on the Web site of the ACA Group‚ an alliance of highly trained and experienced consultants and instructors. The ACA Group provides in-house training‚ management consulting‚ and systems installation. You may recognize the names of some of the
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Title of the Report: Case Analysis of ‘The Cooperative Bank’ The Purpose: The purpose of the report is to submit the analysis of The Cooperative Bank based on the Activity Based Costing methodology To whom it is submitted (Name of the instructor): Prof. Sandhya Bhatia‚ Professor‚ Managerial Accounting‚ Indian Institute of Management‚ Udaipur Name of the Author: Abhishek Sengupta Anubhav Nigam Ravindran Damodaran Saurabh Srivastava Date of Submission: 24 February 2013
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started using activity based costing to allocate operating expenses to products and customers. The overall process is important to the ultimate success of the bank‚ so it needs to be logical and transparent. The bank’s project team came up with 3 questions for the activity-based costing: “How should it define resource pools? What activities should it define? Should it analyze costs by product or by customer?” These questions seem very logical in helping implement the activity based costing. By writing
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_______________ Tutor______________________ Name- Mohammed Bhuiyan ID-000668860 “ABC is still relevant for companies in all geographical locations – critically discuss” The theory of activity based costing (ABC) was developed in 1970’s to understand the product and customer cost and profitability based on the production or performing process in the manufacturing center of United State (Glad & Becker‚ 1996). Later‚ it got the reorganization after getting introduced by Kaplan and Copper in
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Executive Summary An organisation’s management makes decisions based on the cost and profitability of its products or services. The article ‘Implementing Time-driven Activity-based Costing (TDABC) at a Medium-sized Electronics Company’ suggests that the TDABC model derived from the traditional ABC model is useful for effectively analysing an organisation’s costs and profitability. The TDABC model would be an effective decision making tool for Hotel Babylon. Article Content This article examines
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90% of orders were for custom motors whereas standard motors still took around 50% of total annual output in 1987. The firm also identified problems in traditional volume based costing system which could not reflect processing of order and special components accurately. With the new costing system which subtracted activity based cost from support related overhead‚ the firm could recognise profitable orders and consume resource efficiently. Problems and Issues: The first problem in 1970s is that EMW
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E INTRODUCTION TO COST MANAGEMENT Activity-Based Costing and Management After studying this chapter‚ you should be able to . . . 1. Explain the strategic role of activity-based costing 2. Describe activity-based costing (ABC)‚ the steps in developing an ABC system‚ and the benefits and limitations of an ABC system 3. Determine product costs under both the volume-based method and the activity-based method and contrast the two 4. Explain activity-based management (ABM) 5. Describe how ABC/M is
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controller‚ Sally Fields‚ to prepare an analysis using activity-based costing. Sally accumulates the following information about overhead for the year ended December 31‚ 2012. | | | | | | |Cost | | | | | | | |Total | |Driver | |Overhead | |Activity | |Cost Driver
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Accounting……………………………………………………………………03 Introduction……………………………………………………………………………………..03 Traditional costing v/s activity based costing…………………………………………………..04 Need for an Activity Based Costing……………………………………………………………06 Stages in Activity Based Costing……………………………………………………………....08 Cost Drivers…………………………………………………………………………………….09 Classification of activities………………………………………………………………...……10 Steps Involved in the Implementation of Activity Based Costing……………………………..11 Working Example……………………………………………………………………………...13 ABC and the
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declined * Some of the operational problems have aroused due to introduction of Red coloured pens which required more changeovers from the existing process * All plants indirect expenses were aggregated at the plant level and allocated to products based on their direct labour content. The above mentioned problems are important especially because company wants to introduce some new range of products so without knowing the causes of current problems it would not be healthy to go ahead with new introductions
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