Essay on Global Electronics

Assuming that the company’s goal is to maximize profits, the current cost system is not an appropriate tool for strategic planning. The ambiguity of the overhead costs per product makes it difficult to accurately analyze the cause and effect relationships of changes and/or improvements to specific product line.

The week four individual paper addresses the implementation of Activity Based Costing (ABC) by Super Bakery, Inc., a virtual corporation founded by Franco Harris. Specifically, management strategies, the reasoning behind an ABC system, and the alternatives of a job order cost system or a process order cost system are assessed for this enterprise.

Overhead costs are not in proportion to the production output because of the method they are using. This leads to inaccurate pricing and costing decisions. An Activity Based Costing System would help find the real relationship between the products produced and overhead.

The week four individual paper addresses the implementation of Activity Based Costing (ABC) by Super Bakery, Inc., a virtual corporation founded by Franco Harris. Specifically, management strategies, the reasoning behind an ABC system, and the alternatives of a job order cost system or a process order cost system are assessed for this enterprise.

Mitel Semiconductors Mitel Semiconductors is a division of Mitel Corporation. The semiconductors division focuses on the business communications segment of the overall semiconductor market. The segment is relatively small when compared to the semiconductor market as a whole but the segment is experiencing high levels of growth over the next five years. Currently Mitel Semiconductors holds 7% of the business communications segment and management would like to see market share double in the next five to six years. Mitel Semiconductors is quickly approaching full capacity at its Bromont Foundry that performs the

Under an ABC system, the allocation of costs to products is achieved through at least four analytical steps. Firstly, costs are grouped into activity levels. Secondly, cost drivers are

Activity-based costing (ABC) methodology is an instrument designed to provide accountants and managers with valuable costing information that will allow them to make sound strategic decisions. It is used as a secondary methodology rather than a replacement for the company’s primarily costing system. The ABC methodology identifies activities in an organization and for each activity it assigns a cost. The cost reflects the actual resource consumption by each activity that has been identified.

As previously mentioned, the use of activity-based costing gives Kemps an advantage when competing for customers in an ever more competitive and growing market. However, the ability to succinctly distinguish how many small changes, when taken together, can have a large impact on cost savings (and therefore profit), is necessary in order to convince customers who may not be familiar with the many benefits of ABC. Mainly, management would want to demonstrate how the cost savings that they enjoy are ultimately passed on to their customers, perhaps by showing some of the improvements that have been made to their own company as a result of implementation, specifically focusing on advancements that would have a direct impact on the customer’s business.

With so many careers in the world which one is most important? This is asked all the time, well it’s not about which one is most important because a lot of careers are important. It’s really about how much your career impacts the world. Electrical engineers have an impact on the world by what electrical engineers are a part of. They are responsible for anything that is electrical and that is a lot of things in the world today. The reasons they have an impact on the world because people expect the engineers to solve problems in finding another energy source to replace a source that is becoming scarce, to have other tools to help them with their task, to be quicker in making newer things to help advance the world to be high tech, how much

An organization costing system is a system that helps the management with the strategy planning while the system plays an important role in providing accurate cost information about the products and customers (Curtin, 2006). UPS utilizes the Activity-Based Costing (ABC) system. ABC assumes that activities cause costs and that cost objects create the demand for activities (Marx,

with a number of strategic issues facing a capital-intensive, mature industry. Their product costing system was

Northern Alberta, the oil sands development area surrounding Fort McMurray, is the fastest growing economic area in Canada for several years. Obviously Bolster’s total market share in this area was the highest with one third of the total market share it held national wide. Vickers based in Edmonton, Alberta covered 50% of the local market share and 75% of servicing in that area in spite having a national distributor, National Electronics (National). Also local firms preferred to do business with Vickers than National which has their nearest warehouse in Calgary, Sothern Alberta around 750 Km from Fort McMurray. (Exhibit 1)

With this system each customer’s order cost the same amount to complete causing orders with high profit limits to subsidized orders with low profit limits making it difficult for Super Bakery to know the true cost for an order. The company changed to the activity-based costing (ABC) system allowing the managers the ability to recognize the cost and profit margins for each sale. The ABC system associates the costs with the activities allowing managers the opportunity to access a system that allocates overhead costs that uses multiple bases. Costs can be traced back to each individual’s account regardless of the product provider letting managers know which products are profitable and which ones are not. The traditional costing system allocates cost to departments or jobs instead of overhead cost pools. The traditional costing system makes it difficult to know which activity or product is making a profit.

Question 2. Was the implementation of ABC at GEI successful? What did GEI do well? What areas of the implementation could have been improved on? What are the key success factors that lead to or impede successful ABC implementation? Be sure to consider behavioural as well as technical factors. Analysis 2: It appeared that GEI 's two-phased implementation plan had been partially successful. The first phase succeeded in delivering timely, revised product-cost information for strategic pricing and mix decision making. The second phase struggled to deliver upon its promise of delivering productivity improvement and cost reduction. The ABC implementation was completed in the nine-month time frame, as planned. Based on a total of 88 interview sessions, 674 activities and 254 activity drivers were identified across all five plants and entered into the standard cost subsystem that provided data for the financial reporting system. The project team streamlined the implementation process by only including activities within the cost model that it believed could materially affect strategic product-pricing and mix

At present PC4U apportions its production overheads based on direct labour hours. With a range of products available and opportunity for customising these products individually to meet the retailer’s needs, this report aims to assess the effectiveness of this traditional method of allocating production overheads. It will discuss the drawbacks of the current approach used by PC4U, as well as an alternative approach in the Activity-Based Costing system, which “is intended to overcome the weakness of the traditional method by having various pools of costs and then allocating each pool’s costs on the basis of its root cause.”(Averkamp 2007) As well as comparing the benefits and drawbacks of these costing systems to determine what recommendations should be given regarding the approach PC4U should adopt, the report shall also discuss the impact an activity based management system may have on the company.