Information Age :: essays research papers

Discussion Board Activity QuestionActivity Based cost in the Information AgeActivity based costing systems provide a much more accurate picture of product costs than do tralatitiousistic product costing systems. This exercise focuses on an article presented on the Web site of the ACA Group, an alliance of highly trained and experienced consultants and instructors. The ACA Group provides in-house training, management consulting, and systems installation. You whitethorn recognize the names of some of the Groups clients including General Motors, Nissan Motor Company, Hughes Aircraft Company, Dole Packaged Foods, Gillette, Xerox, Gateway, and Anheiser Busch. The title of the article used for this exercise is entitled "Activity based Costing in the Information Age." (http//www.theacagroup.com/activitybasedcosting.htm). It was written by Jim Tarr, president of J.D. Tarr Associates. Mr. Tarr has over 25 years experience in consulting, senior management, and in industrial and man ufacturing engineering. You have been asked by your manager to read the article and prepare a brief for other managers in the organization. The brief must answer the following questions. 1. What are some of the advantages and disadvantages of traditional product costing systems? There are many advantages and disadvantages, in traditional product costing systems. As, listed in Mr. Tarrs article you can see first off that the advantages are apparent and clear. The purpose for this system is what is was intended for. And that is standard cost bill, Companies where designed to do the following for success.1) homogeneous products, 2) large direct costs compared to substantiative costs, 3) limited ability to stash away data and 4) low "below the line" costs. (Tarr, James D. N.d.) So, with changing times and the system being build over 70years ago. This has been cause for change because of the disadvantages the system brings to the table due in digress to the advent of certifi ed financial statements, accounting systems became more structured to comply with the demands of outside(a) stakeholders (Tarr, James D. N.d.) So, the primary purpose and focus of cost accounting today is to value inventory for financial statements. The negative trend continues due in part to the floes that the "leveraging effect" of direct labor overhead application as cause as many other applications have given cost accounting negative effects as well. 2. For what type of business case were traditional costing systems designed? Why isnt a traditional costing system becharm for todays companies?Traditional costing systems were designed for a company with large direct costs in comparison to indirect costs, a limited ability to collect data, homogeneous products and low below the line costs.