could you please reply this two comments to my last discussion homework? Just a short answer. One paragrafh each could be ok.
Hi J, I think you hit the nail on the head. Simple costing systems are much easier to use and much more cost effective than ABC systems. However, ABC systems are able to produce much more accurate data than simple costing systems which can be extremely beneficial to a company, especially when making decisions based on the cost of products (Horngren et al., 2012, p. 148). With simple costing systems, there is a much higher probability that products will be over or undercoated (Horngren et al., 2012, p. 140). I think that it all depends on the individual company and how they are planning to use the information for if a simple or ABC system will be best.
I had a very similar viewpoint on the article, “Rethinking Activity-Based Costing”. This new concept of a “time-driven ABC” is very innovative and cost-effective take on an ABC system (“Rethinking”). I also think that this new take on an ABC system will be the most beneficial for larger organizations with a large amount of activities and products. They would find this new approach much more cost-effective and possibly even more accurate than their current system.
I think you did a great job explaining the pros and cons of the ABC system. I would agree too that updating the system would require detailed and accurate judgments of costs or improper assigning of these costs would play a negative role in this system. As for the updated version of the ABC system, I too think that it would be beneficial for many businesses. The key factor is making sure to assign costs to the right products and when updating the system make sure the right managers are involved to maintain these accurate costs.
- Posted: 4 years ago
- Due: 13/12/2015
- Budget: $20