StudentShare solutions
Got a tricky question? Receive an answer from students like you! Try us!

Research Paper example - Value and Drawbacks of Activity Based Management

Only on StudentShare
Research Paper
Finance & Accounting
Pages 5 (1255 words)
VALUE AND DRAWBACKS OF ACTIVITY-BASED MANAGEMENT Name: Institution: Introduction Activity based management refers to a management approach that applies activity based costing designed for decision-making and development of organizational strategies. Its main aim is to analyze cost of processes for informed decision making into reduced operational cost at maximized customer utility levels…

Extract of sample

This paper seeks to present a concept proposal for value and drawbacks of activity based management. The paper will develop a problem statement, discuss the significance of the problem, the advantages and drawbacks and explore existing literature on the topic. Statement of the problem The scope of activity based management and its relation to activity based costing identifies the management approach as a key line towards improved profitability of an organization. With its objectives of identifying and controlling activities that do not add value to processes, activity based management is essential in controlling production costs towards managing profitability. It forms the basis on which strategies are developed for effective elimination of ‘non-additive’ processes through activity costing (Maher, Stickney & Weil, 2007). Based on the significance of the management approach, the concept will seek to investigate the significance of value and drawbacks of activity based management. Significance of the research The concept into value and drawback of ‘activity-based’ management is based on the importance of the management approach to an organization. ...
Download paper
Not exactly what you need?

Related papers

Activity Based Costing (ABC)
Historically, ABC started to become popular as an alternative approach to traditional cost accounting about three decades ago, where the latter has become increasingly proving its irrelevance (Emblemsvag, 2010). The increasing automation of production as compared to being labor-intensive, the multiple product lines compared to small number of products being produced, and the increasing overhead…
12 pages (3012 words)
Product Costing - Traditional Methods and Activity Based Costing
The problem here is that the tools used for production are shared by two parties and that the farm is under the control of several parties. Hence, the establishment of profit and cost centers is essential for rightly measuring the level of earnings and costs. In the system of Activity-Based Costing, the activities are mainly taken into consideration. “Activity Based Costing is a costing system…
4 pages (1004 words)
Activity Based Costing
More than that, it traces back the cost to the activities and processes (Heisinger, 2010). Above all, use of activity based costing (ABC) method especially in companies with diverse centers and distribution channels has proven to be suitable. Unlike other methods, the activity based costing (ABC) method ensures that there exists a direct correlation between the related overhead costs and the…
4 pages (1004 words)
Activity Based Costing
Activity costing being one of the methods of cost allocation. There are four major steps in cost allocation using this method. First is the determination of the major activities of the business that result in cost increases. The cost centers of the activities are then determined. The third stage is the determination of the cost drivers i.e. the factors responsible for the increase in cost in the…
Primary Drawbacks of Net Present Value as Capital Budgeting Technique
This entire process has multiple loopholes, for instance the uncertainty that is prevailing when it comes to estimating future cash flows of that investment opportunity is high enough to put this technique under scrutiny. Next loophole is regarding the discount rate that is used to reach the present value of a cash flow. Again the accuracy of discount rate used is of critical importance in…
6 pages (1506 words)
Activity-based costing (ABC) in service industry
However, it has often been argued that implementing such pricing strategies might prove to be quite challenging in case of service oriented companies in comparison to the product rendering companies owing to the greater involvement of intangible assets and liabilities. In this regard, various models have been developed with the intention to assist in determining the accurate costs incurred in…
6 pages (1506 words)
The Activity Based Costing System
ta for input may be used differently according to different methodologies of the costing information system which may result in the production of varying outputs of information. A costing system is aimed at generating information to find ways to minimize waste in production. It should be taken care of that the benefits that are derived from the costing system should be higher than the resources…
10 pages (2510 words)