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 spend 2007 ISSUE OF MANAGEMENT ACCOUNTING QUARTERLY CONTAINED THE fable OF A house servant CONSUMER-ELECTRONICS MANUFACTURER, REFERRED TO AS XYZ high society, THAT SYSTEM. IMPLEMENTED A RUDIMENTARY ACTIVITY-BASED COSTING (ABC) ACTIVITY-BASED COSTING WITH THE RECENT EMERGENCE OF TIME-DRIVEN (TDABC), WE indomitable 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 potential difference POWER OF TDABC AND THE IMPORTANT subprogram OF ENTERPRISE RESOURCE supply (ERP) SYSTEMS IN IMPLEMENTING ADVANCED COSTING SYSTEMS SUCH AS TDABC. A recent Management Accounting Quarterly article told the communicate of a domestic consumerelectronics manufact urer, referred to as XYZ Company, that redesigned its internal accounting system.

1 At the time, XYZ was experiencing increased foreign competition, escalating manufacturing support bes (associated with an expand crossroad line), increased inventory holdings (and associated holding costs), and diminishing change flow. The familiaritys existing cost accounting system was considered dim at best. XYZ took action. It implemented a simple activitybased costing (ABC) system, which provided the auberges management with valuable insights and real, but modest, financial benefits. For example, the fresh cost system allowed XYZ to estimate return on glaring! 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 SPRING 2011, VOL. 12, no(prenominal) 3 and return on investment (ROI) results for its major result lines and its individual customers, neither of which was viable under the former cost system. Because of this, the company was able to bid inventory more effectively, improve bud get ining, and increase the bottom...If you want to get a full essay, order it on our website: OrderCustomPaper.com

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