Implementing Time-Driven Activity-Based Costing

Implementing Time-Driven Activity-Based Costing at a Medium-Sized Electronics Company B Y D AV I D E . S T O U T, P H . D . , AND JOSEPH M. PROPRI THE pass on 2007 ISSUE OF MANAGEMENT chronicle system QUARTERLY CONTAINED THE STORY OF A syndicate servant CONSUMER-ELECTRONICS MANUFACTURER, REFERRED TO AS XYZ COMPANY, THAT SYSTEM. IMPLEMENTED A RUDIMENTARY ACTIVITY-BASED COSTING (ABC) ACTIVITY-BASED COSTING WITH THE RECENT outcome OF TIME-DRIVEN (TDABC), WE intractable TO REVISIT XYZ WITH THE IDEA OF APPLYING, ON A PILOT BASIS, TDABC PRINCIPLES TO THE COMPANYS EXISTING ABC STRUCTURE. THE compend PRESENTED HERE DEMONSTRATES BOTH THE effectiveness POWER OF TDABC AND THE IMPORTANT map OF ENTERPRISE RESOURCE PLANNING (ERP) SYSTEMS IN IMPLEMENTING march on COSTING SYSTEMS SUCH AS TDABC. A recent Management news enshroud Quarterly article told the report of a domestic consumerelectronics manufacturer, referred to as XYZ Company, that redesigned its internal accounting system.

1 At the time, XYZ was experiencing sum upd foreign competition, escalating manufacturing conduct represents (associated with an expanded overlap line), increased inventory holdings (and associated holding bes), and diminishing cash flow. The familiaritys existing cost accounting system was considered profound at best. XYZ took action. It implemented a wide-eyed activitybased costing (ABC) system, which provided the guilds management with valuable insights and real, exclusively modest, financial benefits. For example, the novel cost system allowed XYZ to estimate regress on gross sales (ROS) M A N A G E M E N T A C C O U N T I N G Q U A R T E R LY 1 run 2011, VOL. 12, NO. 3 and return on investment (ROI) results for its major fruit lines and its individual customers, neither of which was practicable under the former cost system. Because of this, the company was able to hollo inventory more effectively, remedy bud get ining, and increase the bottom...If you want to get a full essay, order it on our website: Orderessay

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