Activity-Based Costing (Abc) in Service Industries Essay

2002 Words Mar 14th, 2013 9 Pages
Activity-Based Costing (ABC) in Service Industries
H & R Block

H & R Block
A Study of TDABC Costing Robert Kaplan defines activity based costing (ABC) as a system that “provides the conceptual framework for linking financial, production, scheduling, order-entry, marketing, and sales data… into a comprehensive costing and profitability model that reports profitability by individual product, customer, and even by order. (Kaplan, 2009). Time-driven ABC has taken this methodology a step further and simplified the process to make an even more powerful tool to measure the financial effectiveness of a company. This paper is attempts to take a U.S. service company and map out an implementation of TDABC to prove the ease and
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This is not just a year-end service, but help throughout the year on everything from payroll to bookkeeping to tax advice. For those do-it-yourselfers, H & R block offers a service called “Best of Both” where you get the convenience of online tax preparation with the support of an experienced tax professional that will review, correct and even e-file your return. They also offer services such as Block Live, Second Look Review, and Peace of Mind extended service plan, IRS Tax Audit Support, W-2 Early Access, and even Individual Taxpayer Identification Number for those not eligible for a social security number.
ABC Implementation and Benefits A typical H&R Block office employees an Office Leader, Tax Professionals, Client Services Representatives, Administrative Services and possibly a training staff. The typical activities of an office include income tax preparation from the simplest of 1040EZ to a complex return involving businesses / rentals, investments, and deductions. The H&R tax professionals are paid an hourly rate based on his years of experience with a bonus tied to the amount of tax returns he files. He is also paid a commission on any of the extra services he is able to sell the clients. A potential customer pays H&R a fee roughly based roughly on the number of pages his return entails. Kaplan explains in
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