...needs. Phase Three, the design phase, involves model building for resources, activities, and cost objects as well as confirming the results. Phase Four includes the implementation of the ABC methodology into the various operations and plants around the world. This included verification and validation of the model results, interfacing with the local MIS system, and institutionalizing a lessons learned approach for correcting and improving the ABC system. ABC is also a tool in the Activity Based Management (ABM) effort of the complete manufacturing process. ABM not only determines product costs more accurately but also determines capital/resource expenditure prioritization, allows better organization redesign, identify areas for cost reduction, pinpoints where efficiency improvement should have the greatest impact, and provides accurate performance measurements. (Best Manufacturing Practices, 2007) A well-designed and implemented ABC system is a powerful aid to management evaluation and decision-making, thereby improving organizational performance. ABC does...
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...Abstract. This paper deals with the application of activitybased management (ABM) in a small company. The project took place in G. E. Mustill, a company that producesmachines for the photo framing industry. This project aims to develop an ABM system for the company which leads to appropriate improvement actions based on a make or buy decision about di erent parts of the machine, `four-head foiler’. Firstly, a theoretical framework for the design of an ABM system is developed. Then, secondly it is used to improve the businessperformance of four-head foiler manufacturing. The activities required to manufacture this machine are identi® ed and then quanti® ed by their consumption of resources. The factors causing or driving the cost (cost driver) of an activity in question have been identi® ed and used to identify the value-adding and non-valueadding activities. Also, some suggestions are o ered to improve the performance of the company using the ABM system. 1. Introduction The analysis and cost of activities provide ® nancial and non-® nancial information which is the basis for activitybased management (ABM). ABM makes this cost and operational information useful by providing a value Authors: A. Gunasekaran and R. McNeil, Department of Management, University of Massachusetts, North Dartmouth, MA 02747-2300, USA, e-mail: agunasekaran@umassd.edu, and D. Singh, Department of Manufacturing and Engineering Systems, Brunel University, Uxbridge, Middlesex UB8 3PH...
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...com/accounting-reporting/methods-standards-cost-accounting/498244-1.html#ixzz1nMWBS5qI By Juras, Paul E. ABSTRACT Descriptions of activity-based-costing (ABC) systems have become a standard part of managerial accounting texts. While ABC implementation issues are the focus of a number of articles, these issues are often not addressed in a typical textbook. This case is designed to familiarize you with the behavioral and technical variables that can aid or impede successful ABC implementation. Anderson's (1995) factor-stage model provides a template to organize the discussion of ABC success factors. In this case, you will be cast in the role of a business consultant. You are asked to synthesize the case study's key "change management" insights into a report that could be shared with co-workers in an intranet-based knowledge management system. In addition, you may be expected to prepare a formal presentation of the report for your peers. Implementing change in an organization is about ninety percent cultural and ten percent technical. This is because the organization dynamics, politics, and search for a champion that go on are the real issues that make or break the project. One of the reasons we were able to implement ABC successfully was because the right people became champions. Chris Richards, Director of MIS, Global Electronics, Inc. BACKGROUND Global Electronics, Inc. (GEI), headquartered in Sarasota, Florida, designs, manufactures, and markets discrete power semiconductors and analog, digital, mixed-signal...
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...AN ESSAY ON ACTIVITY BASED MANAGEMENT (ABM) HOW DOES 21ST CENTURY MAKES PROFIT HAPPEN? COST AND MANAGEMENT ACCOUNTING :BX2012 ASSIGNMENT DONE BY: EVA LOVELIN-12765541 WILSON HOW DOES 21ST CENTURY MAKES PROFIT IT IS TRUE THAT WE AS HUMANS HAVE EVOLVED GREATLY IN ALL ASPECTS OF LIFE. STARTED FROM THE STONE AGE AND NOW WE HAVE MADE OUR LIVES SO MUCH BETTER AND YET THE THIRST FOR KNOWLEDGE, GROWTH AND TO ACHIEVE MORE IS EVER LASTING. WE JUST CANNOT GET ENOUGH AND NOTHING WOULD BE GOOD ENOUGH AS THERE WILL ALWAYS BE SOMEONE TRYING TO MAKE SOMETHING THAT SEEMS SO HARD SO EASY. Taking this topic back to where it is suppose to be, that is about business. Entrepreneur, managers, employees and customers too have evolved greatly. The market is ever growing, and gone are the days where people would limit to the nearest available market. Now a days we can find the market on our phone, at home sitting and easily going through the stuff that we might need. With this the competition has also grown a lot, as businesses dealing with same products have competition locally as well as globally. Wow, sounds like it's a tough world, isn't it? Ever wondered what does a company do to get things right? There are so many companies and organisations dealing with different goods and services, yet why only a few get so popular with some particular product or services provided. Does that mean that the other companies are not doing their best? Maybe they are doing something wrong or could be that they don't...
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...H & R Block is one of the largest and oldest service providers. The company was founded by brothers Henry and Richard Bloch in 1955. The company began franchising in 1956 and they went public in 1962. The company employed over 100,000 tax professionals that are trained both within the U.S. and worldwide. The company has prepared more than 550 million tax returns since the business started in 1955. One key important key to the company success is that they have a retail office within 5 miles of most Americans. You are able to do your taxes both in person and on-line because H & R Block offers these services. The tax-payer can chose to walk into an office and work face-to-face with the tax specialist, they can work totally on their own using the online or packaged do-it-yourself tax prep tools, or they can utilize the do-it-yourself software with unlimited help from and online tax professional. H & R Block will offer you a wide variety of tax consulting services. Straight forward tax return offers the most basic start which is simple. You are able to accomplished this either on-line or in house. H & R Block also offer “drop off” service. A small business service is offered by H & R which includes helping the preparer to navigate the tax requirement of running a business. This is done throughout the year and not just a year-end service. H & R offers a service called “Best of Both”. This is where you get the convenience of doing it online with tax support preparation from...
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...Activity Based Management A Summary Managerial Accounting Abstract Activity-based management (ABM) is an approach to management that directs the focus of cost managers towards activities analysis. Theoretically by concentrating on activities, this will increase the ability of management to control costs be improving efficiencies. Activity-based management (ABM) uses activity-based costing (ABC) information. ABM/ABC has been around for over 25 years and has gone through its peaks and valleys. This paper will give a short overview of ABM/ABC as well as discussing the main points of ABM including its goals, merits and drawbacks. Activity-Based Costing (ABC) “Where It Begins” for ABM Activity-based costing (ABC) is a costing method that assigns resource costs to products or services based on activities performed. The whole idea of this costing approach is that an organization’s products or services are produced or performed as a result of activities and activities use resources which incur costs. The costs of resources are assigned to activities based on the activities that use or consume resources and costs of activities are assigned to products or services based on activities performed. It is imperative in using ABC to identify the relationships between resource costs, cost drivers, activities, and products/services in assigning costs to activities and then from...
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...Title Page Assignment Title Specific elements of essay: * Describe the Goals & objectives of my organisation * Understand the specific responsibilities of middle management in enabling an organisation to achieve its goals Gareth Lewis Date: 12 June 2013 Birth: 08/03/1956 Phone: 01656 773163 Email: gareth@lewis453.orangehome.co.uk Page 2 This assignment has been produced to provide evidence of my organisations goals & objectives, the evidence provided gives clear distinction between the goals & objectives of my organisation. The essay also includes essays on how my organisation shall meet its objectives & goals, and the specific responsibilities of middle managers in enabling my organisation to achieve its goals. There are sections describing the differences between goals & objectives and the different role in relation to Leaders and managers Page 3 Introduction I am the Site Manager for the Princess of Wales Sterile Services department; I have worked in Sterile Services for 27 years and have progressed through nearly every role prior to becoming Manager. My responsibilities are to provide a Sterilization of instrumentation service to firstly Main Theatres within the Princess of Wales Hospital and Neath Port Talbot Hospital and to all NHS services who require re-process of surgical instruments for safe patient use. This role requires me to have knowledge of all aspects of the decontamination re-process of surgical instruments...
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...Activity-based management in a small company 1. What are the major benefits of activity-based management? ABM provides utilizes value analysis, cost drivers and performance measures in order to improve the decision making processes of the organization. Major benefits include – a) ABM provides a formal management system in understanding the contribution to achieve strategic objectives of the organization. b) It helps managers in emulating best practices and establishing process controls ensuring consistently good performance. c) It supports continuous improvement by providing managers with new insights into value adding and non-value adding activities and business processes 2. Why managing operations and activities is not a custodial task? Managing operations and activities is a continuous improvement process rather than being a custodial task. A structured approach to continual improvement is shown in the figure below: 3. How activity-based costing works with activity-based management? ABC is not a method of costing, but a technique which measures the cost and performance of activities, resources and the objects which consume them in order to generate more accurate and meaningful information for decision-making. It helps in gaining a thorough understanding of the business processes and cost behaviour. ABM, on the other hand, utilizes this information to manage activities and make informed decisions about lines of business, product mix, processes and product...
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...1. Under the original (old) cost system: a. Compute the single indirect cost allocation rate that the bank would use to allocate the total indirect costs presented in Exhibit B. 2850 / 95000 = $0.03 b. Use your answer to part A to determine the total annual indirect cost assigned to: i. The retail customer line, and 9500 * 0.03 = $285 ii. The business customer line. What drives theses allocations? 85500 * 0.03 = $2565 Paying checks which was processed c. What proportion of the total indirect cost is assigned to: iii. The retail customer line, and iv. The business customer line? Why? That is, what is the underlying rationale for indirect cost allocation under the old system? What assumption must hold approximately true for the original cost allocation procedure to generate “accurate” customer cost information? Retail line: $285 285 /(285+2565) =10％ Business line: $2565 2565 /(285+2565) =90％ Since the old indirect cost was allocated by paying checks, which was processed, and 90% of the checks wrote through business line, 90% indirect cost was allocated in Business line and 10% was allocated in retail line. d. Use your answer to part B and data on the number of retail and business accounts to determine: v. The indirect cost per retail account, and vi. The indirect cost per business account Retail: 285 / 150 (number of accounts) = $1.9 Business: 2565 / 50 = $51.3 ...
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...Letter of Transmit 12th December,2011 A.K.M. Anisuzzaman Adjunct Faculty Business Administration Department East West University Subject: Application for accepting assignment paper Dear Sir, I have the pleasure to submit here with the term paper on “Contemporary issues of management accounting” as requirement for the course code ACT201, based on studying and discussions; I have incorporated the necessary materials to finalize the assignment paper. I also acknowledge my gratitude to those persons who have helped me and passed their valuable comments on the draft of the assignment paper. If you need any assistance in interpreting this term paper, please contact me at any time. Sincerely yours, [ ] Nayeemul Bari ID- 2008-3-10-130 Department of Business Administration East West University Acknowledgements All praise to Almighty Allah. Firstly I would like to thank almighty Allah for helping us all the way and after that I would like to thank our parents for their love, care and support which is always my strength. I would like to thank some more people who make my way easy for making this assignment paper. Grateful acknowledgements are due to our “ACT201” Instructor A.K.M. Anisuzzaman, for whom I was able to complete my assignment. His support, excellent guidance and interests inspired me doing this assignment. He is very insightful and leaded me to achieve my desired result. ...
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...choices and professional courses like MBA, CA, CFA, Law, etc. After gaining awareness about different careers and courses, most of the students were able to take a decision. Almost all of Nitu’s close friends also clinched the issue and were excited about their respective career choices. Two of these friends decided to pursue Civil Services and planned to go to Delhi for coaching in April 2009. Three decided to pursue M.Sc (Computers) course and one decided to undergo training in SAP with an eye on taking up her dream job later on. However, Nitu was still pondering what should be her next move? Lots of advice (unsolicited most of the times) led to equal measure of confusion. Looking at the trend of the youngsters veering towards management education, for once she even thought to be right what her inner voice had all along been prompting. The MBA entrance season was fast approaching. Most of the premier B-Schools’ entrance examinations are conducted around December every year. To confirm her plan, she wanted to seek her father’s advice and guidance before taking the final call. The following was a conversation between Nitu and her father Mahavir Gupta (Gupta), who is an officer in allied services: Gupta: Well done Nitu, you have scored...
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...information generated from an Activity-based management or activity based costing system be used by management? Hello Class, Welcome all to WK 2 of this course on Managerial Accounting! I hope everyone is doing well as we dive into the topic of Activity Based Management (ABM). Here are my thoughts: What are ABM and ABC, and how can both be used by management? ABM is a business process model focusing on the control of production or performance activities so that they improve customer value and enhance profitability. Basically, ABM helps companies and mangers to produce more efficiently, determine product or service costs more accurately and control and evaluate performance more effectively. On the other hand, Activity Based Costing (ABC) is a cost accounting system that focuses on an organization’s activities, collects costs on the basis of the underlying nature and extent of those activities, and uses the gathered information to determine product/service cost accumulation and assess the appropriateness of activity elimination. ABC focuses on attaching costs to products and services based on the activities conducted to produce, perform, distribute, and support those products and services. Under ABC, managers can recognize that costs are incurred at different organizational levels, accumulate related costs into individual cost pools, and use multiple cost drivers to assign costs to products and services. In summary, ABC and ABM are effective in supporting continuous improvement...
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...Activity-based management From Wikipedia, the free encyclopedia Activity-based management (ABM) is a method of identifying and evaluating activities that a business performs using activity-based costing to carry out a value chain analysis or a re-engineering initiative to improve strategic and operational decisions in an organization. Activity-based costing establishes relationships between overhead costs and activities so that overhead costs can be more precisely allocated to products, services, or customer segments. Activity-based management focuses on managing activities to reduce costs and improve customer value. Kaplan and Cooper (in Kaplan, R. S., & Cooper, R. (1998). Cost and effect: Using integrated cost systems to drive profitability and performance. Boston: Harvard Business School Press.) divide ABM into operational and strategic: Operational ABM is about “doing things right”, using ABC information to improve efficiency. Those activities which add value to the product can be identified and improved. Activities that don’t add value are the ones that need to be reduced to cut costs without reducing product value. Strategic ABM is about “doing the right things”, using ABC information to decide which products to develop and which activities to use. This can also be used for customer profitability analysis, identifying which customers are the most profitable and focusing on them more. A risk with ABM is that some activities have an implicit value, not...
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...Checklist for Cost Accounting Exam I Make sure that you are comfortable with ALL the homework assignments (graded and ungraded) and any examples that we worked in class! Also, you are responsible for the material presented in any handouts, including readings/articles from The Wall Street Journal. Know your vocabulary terms. Introduction– How can companies enhance the value of their management accounting systems? What roles do management accountants perform? Explain and give examples of a management accountant's scorekeeping, attentiondirecting and problem solving functions. What guidelines do management accountants use? What do we mean by different costs for different purposes? Cost Terms (Behaviors) and Purposes – What are direct costs? Indirect costs? What is the difference between cost tracing and cost allocation? Discuss the factors that affect direct/indirect cost classifications. What is a cost driver? What is the relevant range, and what is its relationship to the various types of costs? How does a fixed cost behave in total and on a per unit basis? How does a variable cost behave in total and on a per unit basis? How do these costs (in total and per unit) appear on a graph? What about a mixed cost? How do changes in the activity level affect these costs? Be able to determine cost behavior from graphical presentations. What is the gross margin? the contribution margin? Take a factual situation and calculate the gross margin percentage and the ...
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...Objective: To obtain a position where I can maximize my multilayer of management skills, quality assurance, program development, training experience, customer service, and a successful track record in the Blood Banking care environment. Summary of Qualifications: Results-oriented, high-energy, hands-on professional, with a successful record of accomplishments in the blood banking, training, and communication transmission industries. Experience in phlebotomy, blood banking industry, training, quality assurance, and customer service with focus on providing the recipient with the highest quality blood product. Fully compliant with FDA cGMP, Code of Federal Regulations, AABB accreditation, and California state laws. Major strengths include strong leadership, excellent communication skills, competent, strong team player, attention to detail, dutiful respect for compliance in all regulated environments, as well as supervisory skills including hiring, termination, scheduling, training, payroll, and other administrative tasks. Thorough knowledge of current manufacturing practices, and a clear vision to accomplish the company goals. Computer and Internet literate. Professional Accomplishments: • Facilitated educational projects successfully over the past two years for Northern California blood centers, a FDA regulated manufacturing environment, as pertaining to cGMP, CFR's, CA state and American Association of Blood Bank (AABB) regulations, and assure compliance with...
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