Elkay Plumbing

2072 Words9 Pages
Managerial Accounting

Case Analysis: Elkay Plumbing Vaughn, Reginald

1. Please comment briefly on the benefits of Time Driven Activity Based Costing (TDABC)
Time Driven Activity Based Costing (TDABC) is a popular alternative to Activity Based Costing. First, Activity-based costing (ABC) should be defined. ABC is a costing methodology that identifies activities in an organization and assigns the cost of each activity with resources to all products and services according to the actual consumption by each. CIMA, the Chartered Institute of Management Accountants defines ABC as an approach to the costing and monitoring of activities which involves tracing resource
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Order standard products |
|Small order quantities |High order quantities |
|Unpredictable order arrivals |Predictable order arrivals |
|Customized delivery |Standard delivery |
|Change delivery requirements |No changes in delivery requirements |
|Manual processing |Electronic processing (EDI) (zero defects) |
|Large amounts of pre-sales support (marketing, technical, and sales |Little to no pre-sales support (standard pricing and |
|resources) |ordering) |
|Large amounts of post-sales support (installation, training, warranty, |No post-sales support |
|field service) | |
|Require company to hold inventory |Replenish as produced |
|Pay slowly (high accounts receivable) |Pay on
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