...COMPARISON ON TRADITIONAL AND ACTIVITY-BASED ACCOUNTING SYSTEM TABLE OF CONTENT CHAPTER TITLE PAGE LIST OF TABLES i LIST OF FIGURES ii CHAPTER 1. INTRODUCTION 1.1 Understanding of Traditional and Activity-Based Costing System 1 1.2 Company Background 3 1.3 Company History 3 1.4 Company Operation 5 2. TRADITIONAL COSTING SYSTEM 8 3. ACTIVITY-BASED COSTING SYSTEM 9 4. COMPARISON BETWEEN TRADITIONAL AND ACTIVITY-BASED COSTING SYSTEM 11 5. CONCLUSION 12 REFERENCES 14 CHAPTER 1 INTRODUCTION 1. Understanding of Traditional and Activity-Based Costing Systems The difference between traditional costing and Activity-based costing (ABC) systems helps companies determine the cost of a product related to the revenue it generates. The two common costing systems used in business are traditional costing and activity-based costing. Traditional costing assigns manufacturing overhead based on the volume of a cost driver, such as the amount of direct labor hours needed to produce an item. A cost driver is a factor that causes cost to incur, such as machine hours, direct labor hours and direct...
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...Journal of Business and Management Vol. 6, No. 11; November 2011 Activity-Based Costing System in the Service Sector: A Strategic Approach for Enhancing Managerial Decision Making and Competitiveness Ashford C. Chea School of Business, Kentucky Wesleyan College 4721 Covert Avenue, Evansville, IN 47714, USA Tel: 1-812-471-9341 E-mail: achea@ix.netcom.com Received: June 21, 2011 doi:10.5539/ijbm.v6n11p3 Accepted: July 4, 2011 Published: November 1, 2011 URL: http://dx.doi.org/10.5539/ijbm.v6n11p3 Abstract The author begins the article by outlining a brief historical evolution of activity-based costing (ABC) in the USA preceded by an operating definition of terminologies. Next, he presents the literature review and the methodology employed during the study. He reviews the application of ABC in the service sector, followed by an analysis of the unique attribute of the service sector. Moreover, the researcher briefly profiles several service-oriented firms that have successfully adopted and implemented ABC, and presents his findings from the study. He then addresses the limitations of ABC in the service sectors and offers strategies for dealing with these drawbacks. Finally, the researcher outlines the managerial implications of implementing ABC in the service sector. Keywords: Activity-based costing, Service sector, Managerial decision making, Cost measurement 1. Introduction The concept of activity-based costing (ABC) was introduced in the US, initially in the manufacturing...
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...Part B, Q1: The activity-based costing system (ABC) is based on activities consumption of resources and products consume activities, which is to show enterprise to provide a certain quantity of products or services that consume human, material, technology of such natural resources as activities (Langfield-Smith Kim 2009). This is the link resource costs to products. According to this, it can set up the cost pools, then as the quantity of activities to sum up the total cost of activities, calculate the product total and per-unit. In the activity-based costing, the short-term variable costs means that the original meaning of variable costs, these cost based on quantity, and the output of products are proportionately move; the long-term variable costs is based, with activity for movements of changes (Michael H& Khan M 2011). In this case, on the basis of four activities will be use the cost driver to performed the way calculate cost, which is for the number of prints sold and components used in the production for the activity. For the activity-based costing can help solve the problems and increase value to corporation through better controls and asset utilization, more easily carry financial leverage. In addition, ABC is most useful when this product make cost diver demands in resources depends on differences in batch size or complexity. In this case, it has large order, measure product and different kinds of prints. Furthermore, in the cost of these three activities, significant...
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...2. Identify at least three strategically relevant HR systems policies and activities that Siemens has instituted in order to help human resource management contribute to achieving Siemens’ strategic goals. (L02- Assessment Criteria 2.1) 3. Siemens’ as we know is an MNC. Analyze its legal influences in the areas of Employee Relations with reference to its operations in Dubai. (L02- Assessment Criteria 2.2 and L03 Assessment Criteria 3.1) Case Study : Integrating of Strategy and Human Resource Management The experiences of several organizations provide good examples of the integration of strategy and human resource management. One such example is provided by the experiences of People’s Bank, a financial services company headquartered in Bridgeport, Connecticut. Massive changes began to take place in the business environment of banking with deregulation and relaxation of ceilings on interest. Money markets began to drain off funds that ordinarily went into banks’ deposits, forcing them to rely on more expensive sources of funds. Further, the money center banks began to compete in the same middle markets as regional banks. People’s, which was a small regional bank, responded by changing its strategy from a product orientation to one directed toward markets. With a product orientation, products are developed and then markets are sought out in which to sell the product. Conversely, a market orientation involves an opposite approach in that market demands are determined...
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...Capacity- The upper limit on the load that an operating unit can handle Design capacity- Maximum output rate of service capacity an operation, process, or facility is designed for. Effective Capacity-Design capacity minus allowances such as personal time and maintenance. Efficiency-Actual output / Effective capacity X 100% Utilization- Actual output / Design capacity X 100% Factors Facilities 1.Design 2.Location 3.Layout 4. Environment Product/Service 1.Design 2.Product or service mix Process 1.Quantity capabilities 2.Quality capabilities Human Factors 1.Job Content 2.Job Design 3.Training and experience 4.Motivation 5.Compensation 6.Learning Rates 7. Absenteeism and labor turnover Policy Operational 1.Scheduling 2.Materials Management 3.Quality Assurance 4.Maintenance Policies 5.Equipment Breakdowns Supply Chain External Factors 1.Product standards 2.Safety regulations 3.Unions 4.Pollution control standards Capacity Cushion- Which is an amount of capacity in excess of expected demand when there is some uncertainty about demand Economies of Scale-If the output rate is less than the optimal level, increasing output decreases unit cost Diseconomies of Scale- If output is increased beyond optimal level avg unit costs would become larger. Present Value- Expresses in current value the sum of all future cash flows of an investment proposal Cash Flow-The diff between cash received from sales and other sources and cash outflow for labor, material...
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...Solutions to Questions 8-1 Activity-based costing differs from tradi-tional costing systems in a number of ways. In activity-based costing, nonmanufacturing as well as manufacturing costs may be assigned to products. And, some manufacturing costs—including the costs of idle capacity—may be excluded from prod-uct costs. An activity-based costing system typically includes a number of activity cost pools, each of which has its unique measure of activity. These measures of activity often differ from the allocation bases used in traditional costing systems. 8-2 When direct labor is used as an allocation base for overhead, it is implicitly assumed that overhead cost is directly proportional to direct labor. When cost systems were originally devel-oped in the 1800s, this assumption may have been reasonably accurate. However, direct labor has declined in importance over the years while overhead has been increasing. This suggests that there is no longer a direct link between the level of direct labor and overhead. Indeed, when a company automates, direct labor is replaced by machines; a decrease in direct labor is accompa-nied by an increase in overhead. This violates the assumption that overhead cost is directly propor-tional to direct labor. Overhead cost appears to be driven by factors such as product diversity and complexity as well as by volume, for which direct labor has served as a convenient measure. 8-3 Top managers provide leadership that is needed to properly motivate...
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...provided the needed information to compute Traditional Costing and Activity Based Costing (ABC). Based on the information provided, The Hampshire Company should use Activity Based Costing. Activity Based Costing improves a costing system by identifying individual activities as fundamental cost objects. “The development of an ABC costing methodology could typically be analyzed with focus on the following phases: 1. The determination of the significant operational activities. 2. The identification and collection of costs specific to each of these activities. 3. The identification of the cost drivers for each of these activities. 4. The determination of the activity unit costs. 5. The allocation of the costs to the cost objects based on the activity consumption (Buys, Pieter, Green, Kevin)”. It should be understood that an ABC system is not intended to replace the general ledger, but to be viewed as a tool to translate the general ledger. The Activity Based Costing system will identify activities (things the company does) of the value chain, calculate the individual costs of activities, and assign costs to cost objects. The activity-based technique will reach its full potential when it has expanded from Activity Based Costing to Activity Based Management. When looking to adopt the Activity Based Costing system, The Hampshire Company will need identify the activities the company performs. Identifying activities can be difficult and they will need to evaluate the tasks performed...
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...technical specification to customer satisfaction. III. To present with the aid of slides (6 to 10) about the study conducted above to the rest of the class in about 10 minutes with the use of print for information and slides for graphs, pictures, images, video and animations etc. Note to teachers: • A teacher may guide only 6 to a maximum of ten students per year. This is to ensure active participation of each learner. • All 96 hours need NOT be contact hours by the teacher. Students may be encouraged to do activities on their own with peer group to ensure higher level of participation. • There are ten different tasks to be completed in the course of 96 hours. On completion of each task, record the result and the marks along with the initials of the learner for future reference, inspection and evaluation. • A few activities are suggested under each task. Teachers can improvise on the list and add more activities as they progress from one batch to another. • Students should not be compared with each other; instead they must be compared to the standards given against each task. • The standard suggested is minimum requirement,...
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...be used. The knowledge from such conferences have been found to be personally powerfully and also highly applied in the human systems analysis such as house chores, family dinners to board recruitment to multinational dialogues. Bart helps the group participants to learn about the facets of group dynamics such as response to leadership, resistance to task, capability of roles and reaction to authority (Cytrynbaum and Noumair, 2004). Application of BART has been seen useful in the completion of my school project. My school project entails working in a group whereby various activities were carried out such as data collection, carrying out questionnaire interviews to the target participants, data analysis, and preparation of tools for research and analysis and finally data presentation. Normally with all these activities, group members may quarrel, disagree on various concepts (Cytrynbaum and Noumair, 2004). Other team members may lag behind and if a solution is not implemented, these factors may lead to late completion of the project or even lead to the project not being completed at all. Boundary Boundary is usually the container for group work(Hayden and Molenkamp, 2002). Territory, time and task provide the basis for understanding boundaries when it comes to group relations works. The school project involved deadlines, specific time for each activity and due dates which had to be adhered to. To avoid the conflict on who was to do what and who was to go where and at what time...
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...500/2591/0 QAN 500/2587/9 Contents 1 About these Qualifications 4 1.1 6 The Four-Unit Advanced GCE 6 1.3 Qualification Titles and Levels 6 1.4 Aims 7 1.5 2 The Two-Unit AS 1.2 Prior Learning/Attainment 8 9 2.1 AS Units 9 2.2 3 Summary of Content A2 Units 10 12 3.1 AS Unit G451: An introduction to Physical Education 12 3.2 AS Unit G452: Acquiring, developing and evaluating practical skills in Physical Education 24 3.3 A2 Unit G453: Principles and concepts across different areas of Physical Education 31 3.4 4 Unit Content A2 Unit G454: The improvement of effective performance and the critical evaluation of practical activities in Physical Education 55 62 4.1 AS GCE Scheme of Assessment 62 4.2 Advanced GCE Scheme of Assessment 63 4.3 Unit Order 64 4.4 Unit Options (at AS/A2) 64 4.5 Synoptic Assessment (A Level GCE) 64 4.6 Assessment Availability 64 4.7 Assessment Objectives 65 4.8 5 Schemes of Assessment Quality of Written Communication 66 Technical Information 67 5.1 Making Unit Entries 67 5.2 Making Qualification Entries 67 5.3 Grading 68 5.4 Result Enquiries and Appeals 69 5.5 Shelf-Life of Units 69 5.6 Unit and Qualification Re-sits 69 5.7 Guided Learning Hours 69 5.8 Code of Practice/Subject Criteria/Common...
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...resource needs and issues they currently face as basis for staffing decisions. Pat Hartlake, the operations manager recognized the importance of the establishment of a separate and experienced human resource unit and developing good relations with the HR staff to achieve efficiency in addressing human resource problems. Second change is the performance of human resource functions. One activity is staffing or obtaining qualified employees through advertisements and interviewing applicants and looking at application papers to determine work stability. has a background in sales so she is confident in her ability to select qualified employees. Another activity is investing in employee motivation. Previously, the store has a high turnover rate primarily attributed to the inconsistencies in discipline procedures. introduced a performance assessment procedure that considers the quality and quantity of work performed by employees as basis of disciplinary action, possibly dismissal after incurring three valid disciplinary actions, and annual salary increases. Still another activity is employee development through the...
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...Progress Report Template Progress Report # Reporting Period: to Submittal Date _________ Contract No. Project Name: Contractor Name: Project Director (print and sign): Summary of Work Completed During This Reporting Period (List all tasks) |Task |Deliverable by Subtask # |Due Date |% of Work Complete |Date Submitted | |1 Project Management |1.2 Quarterly Progress Report |(mm/dd/yy) |(__%) |(mm/dd/yy) | | |1.5 Contract Summary Form | | | | | |1.6 MBE/WBE Documentation | | | | | |(319(h) only) | | | | | | Contractor Documentation/ Solicitation | | | | | |Documentation | | | | | |1.8 Project Survey Form | | | | |2 CEQANEPA/Permits |2.1 CEQA/NEPA Documents ...
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...Activity 1 1. What Characteristics do you believe a positive role model in the workplace should demonstrate? A positive workplace should demonstrate the following 10 characteristics according to Cox(2002) These are: 1. Uncompromising integrity 2.High energy 3.Good at working priorities 4. Courageous 5. A committed and dedicated hard worker 6. Unorthodox and creative 7. Goal Orientation 8. Inspired and contagious enthusiasm 9. Staying level headed 10. A desire to help others grow and succeed 2. Describe a person you have looked up to as a positive role model. What qualities in them did you admire? What made them a suitable role model? What did you learn from them? Sir Richard Branson is one of the worlds most intriguing, succesful and enduring entrepreneurial business leaders. The founder of the Virgin Group, he has established a very interesting background and approach to both leadership and where he chooses to put his resources to work. He is an extremist in serial entrepreneurship and has a very interesting and exciting leadership style. Qualities:Creativity : Richard Branson’s ventures portray creativity, venturing into airliners using new creative measures such as touch-screen ordering of food and comfortable planes. This comes in an era where most other airliners are figuring out how to remove the last remaining frills to cut costs.Adaptability : One of his strong characteristics, besides his charisma, seems to be his adaptability to situations...
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...started with the its core activity i.e. Making its training activities as Paperless. A project called CTMS (Computerised Training Management System) was developed and designed under the direction of GM(ICT) Smt. Alpana Aggarwal. It was started under the supervision of the then PGM ALTTC Shri N.K. Srivastava Its aim was to have a complete and effective automation of Training Activities which should result in reduced administrative costs and convenience to the participants and to the faculty as well. Since project implementation required sufficient knowledge about the training system & processes at ALTTC hence it was decided to complete the task with the available officers in ALTTC. The importance of the CTMS can be understood by the fact its phase-I was inaugurated by the CMD BSNL Shri A. K. Sinha and its phase- III was inaugurated by Secretary (T) & the Chairman Telecom Commission Shri J.S.Sarma.The ALTTC, which is the apex-training center of BSNL, started with the vision to make ALTTC total paperless institution and become a role model for BSNL. To achieve its vision & mission it started with the its core activity i.e. Making its training activities as Paperless. A project called CTMS (Computerised Training Management System) was developed and designed under the direction of GM(ICT) Smt. Alpana Aggarwal. It was started under the supervision of the then PGM ALTTC Shri N.K. Srivastava Its aim was to have a complete and effective automation of Training Activities which should result...
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...PROJECT using System; using System.Collections.Generic; using System.Linq; using System.Text; namespace ConsoleApplication1 { class Project { public List<Activity> Activities = new List<Activity>(); // список всех работ проекта public List<Relation> Relations = new List<Relation>(); // список всех отношений предшествования проекта // этот метод добавляет работу в проект с заданными: именем, продолжительностью и стоимостью public Activity AddActivity(string name, double duration = 0, double cost = 0) { Activity act = new Activity(); act.Name = name; act.Duration = duration; act.Cost = cost; Activities.Add(act); return act; } // этот метод добавляет отношение предшествования (стрелку) в проект между работой p (предшественник) и s (последователь) public Relation AddRelation(Activity p, Activity s) { Relation rel = new Relation(); rel.Predecessor = p; rel.Successor = s; p.Successors.Add(rel); s.Predecessors.Add(rel); Relations.Add(rel); return rel; } public void landmark() { double c=0; foreach (Activity a in Activities) { if (a.Predecessors.Count == 0) { ...
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