Beruflich Dokumente
Kultur Dokumente
Systems
Chapter 5
Traditional Manufacturing
Costing Systems
Traditional Manufacturing
Costing Systems
resource
Determine the capacity cost rate of the resource by
dividing its cost by the practical capacity
Capacity
Cost of capacity supplied
=
cost rate
Practical capacity of resources supplied
$84,000
2,000 hours
Time-Driven ABC
orders
Increase prices on unprofitable products
Impose minimum customer order sizes
Make decisions on desired product mix
2012 Pearson Prentice Hall. All rights reserved.
Time Equations
fixed
They often do not have direct, traceable costs to
serve as convenient allocation bases
They must supply virtually all their resources in
advance to provide the capacity to perform work
for customers during each period
Implementation Issues
Issues include:
Lack of clear business purpose
Lack of senior management commitment
Delegating the project to consultants
Poor ABC model design
Individual and organizational resistance to change
People feel threatened
2012 Pearson Prentice Hall. All rights reserved.
Historical Origins
Two-Stage Estimation
Approach
First stage
Interview and survey employees to identify
Second stage
Assign activity costs to products based on
Advantages of TDABC
Advantages of TDABC