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(d) Distinguish between rudiment and ABM. Why might a community adopt rudiment, then stop using it, only consider that its adoption had been a success? In underdevelop an activity list, why might employees not want to crack realistic information about the time spent on their activities? Activity-Based Costing (ABC) and Activity-Based Management (ABM) have brought about radical storehouse in price management systems and helped to improve the performance of an organization. As for ABC, it determines the damage of activities without distortion and timely information is provided to management. It consists of two-stage procedure in order to assign overhead exists to products and services. In the start stage, ABC identifies production activities and assigned addresss based on the number of dealings involved. An activity approach kittys is a sort out of completely overhead apostrophizes associated with it. The second stage of ABC is identifying greet drivers to eac h activity damage pool (Hilton 2008, p. 173). individually activity cost pool consist of own pool locate which is defined as cost per unit of the cost driver. As for ABM, the purpose is to support organizational strategy, improve trading operations and manage costs by using provided information. The ABC persona helps to revise the product pricing to reflect the product cost more precisely (Hilton 2008, p. 186).

After initially adopting ABC, a company would have already identified the current activity cost driver rates, estimates of process, product and customer costs. There is a misgiving though with the maintenance of using ABC when we look at for example, a company that have 70,000 employees at more than c facilities ! to submit monthly interview of their time used. The company would urgency to provide 14 full time employees just to upgrade the ABC data collection, processing and reporting which could take up to several months to compute. It is obvious that it requires high time and cost in order to estimate an ABC model. Therefore because of the high cost to...If you want to get a full essay, order it on our website: OrderEssay.net

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