Respond to the required questions, double-spaced, APA format (source citations and reference insertions) essay (Each Question). In each Case Study, you must use at least three (3) references (in text), including the textbook (included below).
Textbook reference:
Managerial Accounting: Decision Making and Motivating Performance- Text Only: Datar, S.
M., & Rajan, M. V. (2014). Managerial accounting: making decisions and motivating performance.
Boston: Pearson. ISBN: 9780137024872
(This Assignment Box maybe linked to Turnitin.)
Respond to the required questions, double-spaced, APA format (source citations and reference insertions) essay (Each Question). In each Case Study, you must use at least three (3) references (in text), including the textbook (included below). Textbook reference: Managerial Accounting: Decision Making and Motivating Performance- Text Only: Datar, S. M., & Rajan, M. V. (2014). Managerial accounting: making decisions and motivating performance. Boston: Pearson. ISBN: 9780137024872 (This Assignment Box maybe linked to Turnitin.) 125 Words (Shawna Lewis) – Reply and Comment on the following: Activity based costing. Or ABC, is a costing method that takes manufacturing overhead costs to products in a more reasonable manner than the more common approach of simply allocating costs based on machine hours. It first assigns costs to the activities that are the real cause of the overhead. After that it assigns the costs of those activities only to the products that are demanding the activities. So, let us say a product that is requires many machine setups, special engineering, and additional testing because it is ordered in small quantities. ABC recognizes those requirements and calculates the cost of the resources used in each of these activities. It will then take the cost of each of those activities and they will be assigned only to the products that needed those activities. The statement “activity-based costing is the wave of the present and the future. All companies should adopt it” I don’t believe I agree with. A majority of companies could benefit from this costing method, but I do not agree that all companies should adopt it. Even if it has grown in favor in recent times. 125 Words (Tomica Beauchene) – Reply and Comment on the following: "Activity-based costing is the wave of the present and the future. All companies should adopt it." Do you agree? Explain. I do not agree with the statement above. What’s good for the goose isn’t always good for the gander. While there are plenty of reasons why the activity-based costing method is beneficial to a company, it is simply not always feasible to actually implement and maintain the system. The detail-orientation and time it takes to produce and maintain the system don’t always make financial sense for a company with potentially limited resources. Also taking into account the potential for data misinterpretation, thus leading to odd item margins – shows that the systems can be fraught with ongoing issues in system continuity (Miller, 2016). While the activity-based costing method has the potential to provide more realistic costs by product, it may not be useful to a company that has smaller overhead costs in relation to the total operating costs (Woodruff, 2019). If a company does decide to implement the method, the best actions to take are to get a buy-in from the rest of the company to ensure as a seamless transition as possible and to have the system implemented by the management accountants as to actualize the process and guarantee the benefits are realized (CMGA.org, 2020). If a company doesn’t have the infrastructure or financial capacity to implement activity-based costing, it should not be required to do so because someone said “it is the way of the future”. Sometimes it doesn’t make sense to try to force a system that isn’t actually a good fit for a smaller firm.