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 account OF A house servant CONSUMER-ELECTRONICS MANUFACTURER, REFERRED TO AS XYZ family, THAT SYSTEM. IMPLEMENTED A RUDIMENTARY ACTIVITY-BASED COSTING (ABC) ACTIVITY-BASED COSTING WITH THE RECENT EMERGENCE OF TIME-DRIVEN (TDABC), WE stubborn 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 dominance POWER OF TDABC AND THE IMPORTANT subprogram OF ENTERPRISE RESOURCE mean (ERP) SYSTEMS IN IMPLEMENTING ADVANCED COSTING SYSTEMS SUCH AS TDABC. A recent Management Accounting Quarterly article told the bailiwick of a domestic consumerelectronics manufacturer, referred to as X YZ Company, that redesigned its internal accounting system.
1 At the time, XYZ was experiencing increased foreign competition, escalating manufacturing support personifys (associated with an spread out crossroad line), increased inventory holdings (and associated holding costs), and diminishing coin flow. The familiaritys existing cost accounting system was considered level-headed at best. XYZ took action. It implemented a simple activitybased costing (ABC) system, which provided the orderings management with valuable insights and real, but modest, financial benefits. For example, the invention cost syst em allowed XYZ to estimate return on rough! 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, none 3 and return on investment (ROI) results for its major crop 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, correct 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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