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Yet, success would be reached as the system would be better able to account for the intangible assets within a corporation and link them to the final costs of the service. This view argues that despite its recognized reduced applicability in today's business community, traditional management accounting systems enjoy the benefit of vast expertise and advantages which have been consolidated across time. Therefore, their elimination would have a negative impact and the most desirable course of action would be that of a readjustment of the system to meet the new and continually emerging needs (Financial Executive, 2002).
The next proposition that is being then forwarded revolves however around the idea that it would be even more efficient to replace the traditional systems altogether, rather than spend additional time and efforts to repair the old one. The traditional techniques of management accounting, despite their past benefits, are nowadays less applicable. And not only that they are less relevant, but they also represent impediments in conducting a proper business operation. "Traditional methods of accounting...
Rather than focusing our efforts on measuring those things that our customers care about, we rely on traditional and complex accounting measures that are long on variance reports and short on measures that drive the business" (Niedenthal, 2001).
References:
Niedenthal, M., April 20, 2001, Traditional accounting measures don't tell full manufacturing story, Kansas City Business Journal, http://www.bizjournals.com/kansascity/stories/2001/04/23/focus4.html last accessed on July 3, 2009
March 1, 2002, Rethinking accounting: Traditional accounting designed for an industrial economy of tangible assets, is under increasing pressure to modernize and reflect the value of the New Economy's intangible assets, Financial Executive, http://www.allbusiness.com/management/130049-1.html last accessed on July 3, 2009
2009, The World Factbook -- United States, Central Intelligence Agency, https://www.cia.gov/library/publications/the-world-factbook/geos/U.S..html last accessed on July 3, 2009
Themido, I., A. Arantes, C. Fernandes & A.P. Guedes. (2000). Logistic costs case study: An ABC approach. The Journal of the Operational Research Society, 51 (10): 1148-1157 Stable URL: http://www.jstor.org/stable/253927 The use of Activity-Based Costing (ABC) reflects the fact that indirect costs and overhead costs are often more draining to modern organizations than direct costs. The article specifically discusses the use of ABC in terms of its use in costing logistics services. Traditional costing
An incorrect entry or inherent errors in the accounting procedures (for instance mistakes in contract cost allotment) can endanger the system. Organizations need to make sure that their employees are well versed with the latest cost accounting policies and have a backup plan for unfortunate mishaps. The presence of recruits who are unaware of the cost accounting process often destabilize the investments made on the accounting software (Tinsley, 2010). Time
Managerial Accounting for Sleepease Ltd. "Identify, discuss and critically evaluate the advantages and problems of using the following costing methods for internal reporting purposes": absorption costing; marginal costing. "Refer to the Sleepease case as and when necessary" absorption costing The absorption costing is the type of managerial costing where both the variable and fixed costs are charged to process or product. Thus, "absorption costing is a method for appraising or valuing a firm's total inventory
Accounting Responsibility Responsibility of managers in managing projects and creating budgets Managerial ethics is essential in managing projects and creating budgets. Ethical accounting ensures all financial information is reported to business owners, directors or managers. Managers who fail to report negative information or use a company's internal financial information for personal gain can create serious legal situations for businesses (Vitez, N.d.). Business owners and managers often require all information, whether good or
competing cost accounting approaches and explores best practices implemented in different countries. The essay examines traditional cost accounting (CA), activity-based costing (ABC), Grenzplankostenrechnung (GPK), throughput accounting (TA) and resource consumption accounting (RCA). Tradeoffs Between Cost Accounting Systems Comparing traditional costs systems and ABC shows that there are tradeoffs between cost and usability. The traditional cost system is typically both easy and inexpensive to implement; however, the information obtained from the system
ABC can identify high overhead costs per unit and find ways to reduce the costs, avoid decreases in head counts due to inaccurate allocation of costs, and measure profitability with higher accuracy than traditional costing that uses direct-labor hours as the only cost driver (Activity-based costing, n.d.). Bibliography Activity-based costing (ABC). (n.d.). Retrieved Apr 2, 2009, from Managers-Net: http://www.managers-net.com/activityBC.html Activity-based costing (ABC): What is it and how can reengineering teams use it?