External Forces

Jun 21st, 2015
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Miami University
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McDonald’s has brought smiles to many faces throughout the years and continues to play a major role in our everyday lives. We know the slogan, “I’m loving it,” by heart and we recognize the bright yellow arch that resembles the company.

Word Count: 4461
Showing Page: 1/17
CONTENT1INTRODUCTION12LITERATURE REVIEW22.1Activity Based Costing (ABC) Adoption22.2Factors Influencing ABC32.3Problems of ABC Implementation42.4Advantages of ABC52.5Limitations of ABC62.6Steps in Implementing ABC73Scenario: ABC Implementation in TM83.1Company Background83.2ABC Implementation in TM93.3Problems Faced During Implementation113.4Benefits Gained124Discussion and Conclusion124.1Understanding ABC134.2Advantages and Disadvantages of ABC134.3Conclusion145REFERECES151 INTRODUCTIONIn the traditional accounting approach, everything from marketing expenses to utility bills and without differentiating divisions according to the type of production is considered as overhead in determining the cost. The longstanding issues is that some activities represent more overheads than others. This is unacceptable because two activities that absorb the same direct costs can use very different amounts of overhead. A mass-produced car, for instance, can use the same amount of labour and materials as a customised car. But the customised car uses far more of the company engineers' time (an overhead) than does the mass-produced one. This disparity would not be reflected in traditional costing systems. Thus a company that makes more and more customised products (and bases pricing on traditional costing) can soon find itself making large losses. As new technologies make it easier for firms to customise products, the importance of allocating indirect

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