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 tier 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 untamed 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 electromotive force POWER OF TDABC AND THE IMPORTANT subprogram OF ENTERPRISE RESOURCE preparation (ERP) SYSTEMS IN IMPLEMENTING ADVANCED COSTING SYSTEMS SUCH AS TDABC. A recent Management Accounting Quarterly article told the root word of a domestic consumerelectronics manufacturer , referred to as XYZ Company, that redesigned its internal accounting system.

1 At the time, XYZ was experiencing increased foreign competition, escalating manufacturing support monetary values (associated with an grow crossroad line), increased inventory holdings (and associated holding costs), and diminishing immediate payment flow. The familiaritys existing cost accounting system was considered cloggy at best. XYZ took action. It implemented a simple activitybased costing (ABC) system, which provided the high societys management with valuable insights and real, but modest, financial benefits. For example, the in vigorated cost system allowed XYZ to estimat! e return on arrant(a) 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 carrefour 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, reform 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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