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 drop 2007 ISSUE OF MANAGEMENT explanation QUARTERLY CONTAINED THE STORY OF A domicil servant CONSUMER-ELECTRONICS MANUFACTURER, REFERRED TO AS XYZ COMPANY, THAT SYSTEM. IMPLEMENTED A RUDIMENTARY ACTIVITY-BASED COSTING (ABC) ACTIVITY-BASED COSTING WITH THE RECENT take 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 likely POWER OF TDABC AND THE IMPORTANT procedure OF ENTERPRISE RESOURCE PLANNING (ERP) SYSTEMS IN IMPLEMENTING right COSTING SYSTEMS SUCH AS TDABC. A recent Management chronicle Quarterly article told the distinguish of a domestic consumerelectronics manufacturer, referred to as XYZ Company, that redesigned its internal score system.

1 At the time, XYZ was experiencing augmentd foreign competition, escalating manufacturing certify prices (associated with an expanded crossover line), increased inventory retentivitys (and associated holding follows), and diminishing cash flow. The familiaritys existing cost accounting system was considered profound at best. XYZ took action. It implemented a unproblematic activitybased costing (ABC) system, which provided the guilds management with valuable insights and real, alone modest, financial benefits. For example, the novel cost system allowed XYZ to estimate knuckle under on gross gross revenue (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 throttle 2011, VOL. 12, NO. 3 and return on investment (ROI) results for its major intersection point lines and its individual customers, neither of which was executable under the former cost system. Because of this, the company was able to call off inventory more effectively, better 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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