Suppose an organization uses the activity-based costing (ABC) model. How do you think this model differs from traditional costing approaches? What do you see as advantages or disadvantages for this healthcare organization?
In the traditional system of assigning manufacturing overheads, overheads are first allocated and apportioned to cost centres (production and support service cost centres) and then absorbed to cost objects (e.g. products/services). Under ABC, overheads are first assigned to activities or activity pools (group of activities) and then they are assigned to cost objects. Thus, ABC is a refinement over the traditional costing system. Usually cost centres include a series of different activities. If different products create different demand on those activities, the traditional costing system fails to determine the product cost accurately. In that situation, it becomes necessary to use different rates for different activity or activity pools.
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Suppose an organization uses the activity-based costing (ABC) model. How do you think this model differs...
Discuss briefly the activity-based costing (ABC) concept and explain how ABC can differ from traditional costing approaches? Consider a healthcare organization with which you are familiar that uses an ABC model.
Activity-based costing (ABC) or traditional costing do you think is a better approach to costing and why? Be sure to include in your discussion how you think the method you selected is helpful to managers and would benefit the company as a whole.
Which method; activity-based costing (ABC) or traditional costing do you think is a better approach to costing and why? Be sure to include in your discussion how you think the method you selected is helpful to managers and would benefit the company as a whole.
Compare and contrast the following costing methods: process costing, job order costing and activity-based costing (ABC), including the advantages and disadvantages of using each one of them.
Why would a company choose to sepend the time and money to implement an ABC costing system. What are the advantages and disadvantages of each type of costing system? Why do you think that accountants have developed so many types of costing systems. How do costing systems facilitate companies to grow? Why is important that all the corporate officers have an understanding of the costing system being used. How might it impact their departments (give examples of at least two...
What do you think are some advantages for using the ABC method versus a single plant-wide rate or multiple departmental overhead rates. Why would an activity-based costing (ABC) system appeal to some companies and not all companies. Provide at least 3 examples of companies you think would and wouldn't want to use the ABC method.
Activity-Based Costing Define activity-based costing (ABC) systems. What benefits does implementing an ABC system bring to the company? Explain at least two benefits. What are the disadvantages to implementing an ABC system? List and explain at least two. Would the proposed changes make ABC a universally applicable costing method in your opinion? Why or why not? Elaborate your response. Non-Financial Performance Many city and county governments are discovering that you can control only what you measure. As a result, many...
Which statement is generally true of activity-based costing? ABC uses mainly unit-level cost drivers. ABC pools costs by department. ABC allocates less service costs to product than traditional methods. All of the above are true. None of the above are true.
How is activity-based costing approach a superior costing method when compared to traditional costing approaches? What are the criticisms of activity-based costing approach? Explain in detail.
Suppose an organization has not implemented either activity based costing or measuring the cost of quality but believes both would be valuable to the organization. However, management is currently willing to undertake only one major change initiative. Advise management on the decision between implementing an activity based costing model or beginning to measure the cost of quality.