I’m doing Master of Proffesional Accounting, I’ve to write a report on cost per unit under ABC System in Practice and traditional costing system , and I’ve to elaborate these two elements in my essay.

• Describe the differences between cost per unit under traditional cost system and ABC systems;
• Identify and explain the possible advantages and disadvantages of adopting the ABC system

I don’t have much idea about it. Please give me some idear or help me out for this. Or send me some journals links from where I can get help.

Regards
Narinder Singh

I found your site on technorati and read a few of your other posts. Keep up the good work. I just added your RSS feed to my Google News Reader. Looking forward to reading more from you….

I’m doing MSC Financial Management, I’ve to write an essay on ABC System in Practice. , and I’ve to elaborate these two elements in my essay.

• Describe the fundamental differences between a traditional and an ABC systems;
• Identify and discuss the factors that could affect the successful implementation of an ABC system

I don’t have much idea about it. Please give me some idear or help me out for this. Or send me some journals links from where I can get help.

Regards
Kashif.

” LIFE CYCLE COSTING USING ABC & MONTE CARLO METHODS TO MANAGE FUTURE COSTS AND RISKS”
BY JAN EMBLEMSVAG, 2003

I am doing research on Product Life Cycle Costing, while ABC deals with more detailed cost elements.

rgrds,
Ahmed

THANKING YOU

ABC is ‘old wine in new bottles’ critically discusss.

any advice?

Currently i`m doing a research about COMPARING PRODUCT COST DERIVED UNDER THE TRADITIONAL ACCOUNTING METHOD AND ACTIVITY-BASED COSTING SYSTEM.

But i`m having lack of idea in writing my literature review and my finding…would u help me?

Abstract
The main aim of this project was to obtain an understanding of the different product cost derived under traditional method and activity based costing method that affects the company financial performance. The results of both methods were used to develop a framework to aid company in identifying the difference and the benefit of using activity based costing.
Most business use standard costing techniques into their product costing because it is easy to use and understandable, but current method is not include the whole manufacturing cost or overall operational direct cost, thus QQQ Sdn. Bhd. failed to apportion or allocate their production cost on realistic basic cost. Old method apportions these to arbitrary basis like direct labour, number of units produce and sold. This project will look at the existing of each activity and the relationship between the driver and the product.
In this project, I have show how ABC approach can benefit in the QQQ manufacturing company and compared the information that was available that I believe to be important and relevant to help them in decisions making. This report was not to produce a complete report of working model, but more to explain and demonstrate how activity-based costing will benefit the manufacturing company. This research will give production managers more accurate information that enables managers to take right action that will improve the profitability of their companies. This information can give company a substantial advantage over their competitors because the users of new product will have enough time to improve the performances of their bottleneck and to search for more profitable usage of excess capacities before the actual production take place.

(272)

1.0 Introduction
1.1 Company Background

QQQ Sdn. Bhd. is a private limited company in Malaysia, core business in manufacturing the skin care products, lipsticks and fragrances with more than 5 years experiences. Mr. Harith Fadhilah, is the Managing Director, who also one of the founder of the QQQ (M) Sdn Bhd. This small manufactures company has a mission to be the leader in manufacturing quality skin care and fragrance product in Malaysia. They manufacture very fine and consumer safe products. Mostly their direct materials are imported from Korea because they only use high quality ingredient. With the strength and capability, they are able to acquire latest quality skin-care product, fragrance and lipsticks expertise to further strengthen their competitiveness and react fast to meet customer needs.
Their production range are manufactured based on several procedures start from material were bring into mixing machine, heating, grinding, degassing, filling, cooling, mold releasing and finishing assembly. Then product is ready to market and distributed. There are three machine involve in this whole production process, which is mixing machine, seizing machine and grinding machine.
Company current system measuring product profit by simple calculation of total of overhead and divide by unit produce. Thus, their product costing will remain at problem and company unable to detect how to reduce production cost.
Hence, finance department and Production manager felt that with the implementation of ABC in the company, it will help them to clearly identify the most profitable product and the least profitable product in their company. Meanwhile, ABC also can help organization to educate their employee to understand with the various costs involved in production that enable them to analyze the cost and see which activities that add value and those that not add value.

1.2 Identification of problem.
Manufacturing industry required continuously improvement in the technology and advance costing system in order to sustain their competitive advantage. QQQ current system only looks at the current year profits but not the pontential looses attached to the range of product that they produce. This traditional method simply calculated the product profit but neglect the cost associates with marketing and distribution.
With the increasing of manufacturing cots every year, QQQ existing method unable to give them accurate costing that lead to wrong pricing and thin margins. Current method represent the amount of overhead used in their range product process for skin-care, fragrances and lipsticks to production lines based on unit produce. Infact, this old method also may result of distortion in product costing in accounting periods of low production volume because direct cost and fixed cost are included together. Beside that, manufacturing overhead cannot be reduce accordingly even the production volume is low.
The usage of complex machinery in the production process in recent year’s results worst by dissimilar usage of machinery for the entire range of products. Skin-care required longer machine hour and consume more complex process than fragrances and lipsticks. Current methods allocate cost based on total machine hours used may not fully recognize the unused capacity cost. Hence, there is a consequence that skin care production cost is subsidizing other range product.
At first, QQQ organization a bit reluctant in developing this ABC method to estimates their exact cost because these systems are expensive to adopt and maintain. But finance department believes that ABC system will help them to align their cost of many cost objects of unit’s batches and production process that provides accurate information to support managerial decision and allowed higher proportion of total cost to be allocated to the product more strictly according to production activities.

1.3 Research Question and Objectives

The aim of this project report is to develop a useful approach to understand and define the product cost effectively.

The objectives of this Project Report are:

1 To compare the difference in costing derived from a traditional costing system and activity based costing system.
2 To identify any non-value added activities.
3 To illustrate how activity based costing systems prevent misleading information for decision making in company.
4 To draw conclusions and recommendations regarding the applicability and usability of the activity based costing systems to the organization.

Need help,
rushda

thanks alot!!!!!