Please draft a response to another students discussion Board posting assignment. Here was the question that this student originally was answering:
After reading Chapters 2, 5, 10, 13, 17 in the Blocher Text, select 2 techniques/concepts of interest to you. Submit a thread of at least 500 words examining the relationship between the selected techniques/concepts and strategic allocation of financial resources with respect to revenues and expenses. Support your thread by citing at least 3 peer-reviewed journal articles. Your thread must be in current APA format and must include a reference list.
This is what the student Posted:
Activity Based Costing
Chapter 5’s reading is what caught my attention for the given assignment instructed of me. I observed the activity based costing to be of interest being that since the 1980’s, a drastic amount of firms adopted the ABC system. The majority of firms found ABC’s decreased distortions that resulted from using a system that is volume based. Among the major amount of benefits, activity based costing proves that many firms have encountered improved information that provides better profitability measure (Blocher, E.,Stout,D.,Juras,P.,&Smith, S., 2019).
ABC upholds more informative products that are accurate, that leads to more product and customer profitability measurements that are accurate as well. ABC provides better decision making when it comes to the accuracy measurements of activity driven cost aid managers to improve product and process value by molding better product design and customer decisions, as well as fostering support value enhancement projects (Blocher, E.,Stout,D.,Juras,P.,&Smith, S., 2019). Process improvement with ABC provides information that is necessary to identify certain areas where improvement is processed and needed. Improved planning is imperative being that product is improved which lead costs to be of better estimates of costs for planning and budgeting (Blocher, E.,Stout,D.,Juras,P.,&Smith, S., 2019).
In relation to strategic allocation and financial resources with non-profit organizations, information used is meaningful if the government employees use data that is casual to manage business processes toward the achievement of the organizations strategic objectives which starts with beginning with strong messaging from management expectations from top management that must be articulated to be very clear and precise. Identifying project leadership with key members who exemplify enthusiasm about the strategy, must be identified utilizing internal industry expertise which is imperative which then leads to putting full trust in managers to get to know your process of business with little to no experience with services that could cause a great impact. Establishing employee buy-in could be taken into consideration and planning time for future problems and moderate cultural resistance could help gain employee support (Ogilby, Pforsich, & Johnstone, 2017).
Lastly, identifying critical, strategic level process helps to lead the placement of critical core business process that display as the road map of all activities that are procedure. Working from the top to bottom avoids becoming mired in detail that is unnecessary, and avoid overwhelming personnel who need to have activate on file with on time cards, but choose not to manage their time through ABC codes (Ogilby, Pforsich, & Johnstone, 2017).
Volume Based Costing
Volume based costing is a well -chosen choice for some firms. It is identified to be most appropriate when costs are relatively small across different product lines. For example, it could be a firm that manufactures a limited range of paper products, or a firm that produces a narrow amount of products that are agricultural. Services such as these may be classified as professional may not need ABC generally because labor costs for staff are large with the cost of firm (Blocher, E.,Stout,D.,Juras,P.,&Smith, S., 2019).
Within volume based costing, overheads are charged with products that are a on a volume of production related basis that tie in with direct labour cost, hours, and machine hours (Agarwal, R.) This type of costing system is merely focused on the assumption that majority of overheads are in relation to production volume. Volume based costing assumes simple labor based production low and norm level of mechanization, the cost of overhead vary in small in proportion because support or servicing functions such as purchasing, finance, planning, administration, and accounting are much less (Agarwal, R.)
References
Agarwal R. Volume-Based Overhead Rate: Definition, Features and Limitations Retrieved from
http://www.yourarticlelibrary.com/accounting/costing/volume-based-overhead-rate-definition-features-and-limitations/52597
Blocher, E., Stout, D., Juras, P., & Smith, S. (2019). Cost management: A strategic
emphasis (8th ed.). Boston, MA: McGraw-Hill.
Ogilby, Suzanne M,PhD., C.G.F.M., Pforsich, H., PhD., & Johnstone, T., M.B.A. (2017).
Activity-based Costing/Management: Lessons from a public service organization. The Journal of Government Financial Management, 65(4), 32-37. Retrieved from http://ezproxy.liberty.edu/login?url=https://search-proquest-com.ezproxy.liberty.edu/docview/2101837659?accountid=12085
*** This is the instructions for replying to this students original post:
Submit replies of at least 250 words each to at least 2 other students. Each reply must be supported by citing at least 2 peer-reviewed journal articles. Your replies must be in current APA format and must include a reference list. Make sure that you are adding new and relevant information with each reply.
