Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Critically discuss the following quotation: ABC (activity based cost) information, by itself does not invoke actions and decisions leading to improved profits and operating performance....
Critically discuss the following quotation: ABC (activity based cost) information, by itself does not invoke actions and decisions leading to improved profits and operating performance.... For ABC systems to be effective, everyone in the company-from top management to operating personnel-must view them as cost management tools rather than as accounting tools. To achieve this objective, the accounting or finance department must relinquish ownership of these systems to the users. If accounting or finance fails to understand this key point, then ABC is unlikely to succeed. The result is a reduction in the role of accounting in cost management, not financial accounting. The result is a reduction in the role of accounting in the management of costs. Most companies that implement ABC systems run them to their financial accoutning systems. Parallel systems remove the risk of compromising the cost management capabilities of ABC to accommodate financial accouting rules and regulations
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started