International Journal Business Management -Myassignmenthelp.Com

Question: Discuss About The International Journal Business Management? Answer: Introduction Cost accounting has an important role within the organizations and especially in the organizations that are linked to manufacturing businesses. The process includes the classification, allocation, recording, summarizing and the evaluation of the different opportunities that are present within the company so that the cost can be controlled. This results in keeping the costs low for the organizations and the increase in the profit level (Drury 2013). The companies like to apply the different systems of costing such as Activity Based Costing (ABC), the traditional method of costing system and the others that are present in the market. In the recent years, it can be seen that another method of costing that is Time Driven Activity Based Costing (TDABC) has also emerged in the market, which is being adopted by the companies. The costing system that is traditional in nature is used mostly by the companies, as it is very easy and consumes less amount of time. Nevertheless, in the recent year s, it was seen that the organizations are facing problems in applying the traditional method of costing system. This led to the development of TDABC in the year 2004 by Steven Anderson and Robert Kaplan so that the companies can remove the barriers that are present in applying the traditional method of costing and ABC (Kaplan et al. 2014). The main feature of this report is that it will help in analyzing and evaluating the various features that are present in TDABC and the suitability of it to be implemented within the company. The report will also contain the features, description and the contrasting between TDABC and ABC. Description of client One of the clients for the consultancy firm is Uggs-N-Rugs, which is a business that manufactures and sells ugg boots in Australia. The company was started in 1970 by Bronwyn and Bruce McDougall and used to purchase the products and sell it. Later they found out that the boots were not of the best quality, which led them to manufacture the products. The company noticed that there were many variances that were being used in the process of manufacturing. The founders decided to adopt and implement the TDABC within the manufacturing process so that it can help in the identification of the negative variances and can be eliminated as well from the system. Time Driven Activity Based Costing (TDABC) The concept of TDABC has been used so that it can help the companies in overcoming the difficulties that are present with the traditional method of costing system and in the ABC. In this process, it can be seen that the cost of all the resources that are used in the process of manufacturing are directly assigned by taking in to accounting two estimates that are 1) the time that is required with respect to the production of the units and 2) the per unit cost based on time for supplying the resources and the cost activities. The computation of the cost activities with the TDABC can be done by the six steps, which are as follows: The identification of the services and the activities The calculation of the costs that will be required for the entire groups of resources The time that is required in the computation of the groups of resources within the organization The groups of resources has to be calculated The calculation of time has to be done for each of the activities that are present in the manufacturing process Lastly, the unit cost of the groups of resources has to be multiplied with time that has been estimated with respect to the activities (McLaughlin et al. 2014) Features Regarding the TDABC, it can be stated that it also some features, which needs to be identified. These are as follows: In the process of TDABC, the cost accountants can allocate the costs to the different activities that are present in the business of manufacturing. Moreover, it also results in taking up of lesser time as well (Oker and Adiguzel 2016) The integration with the help of the resources that are available within the system along with Enterprise Resource Planning (ERP) will result in the boost of the process of manufacturing within the organizations (Siguenza-Guzman et al. 2014) The production managers as well get immense help with respect to generating the reports on a monthly basis that are related with the activities required in operation in an accurate manner The costing system that is present in TDABC is more efficient that the traditional method of costing system and the ABC, as it helps in recording the utilization capacity of the manufacturing businesses in a proper manner The implementation of TDABC will help the production management in predicting the future demands of the organizations in an effective way (Oker and Adiguzel 2016) The adopting of TDABC will help[ the company in changing its costing model in to an inexpensive system so that it can result in more profit (Siguenza-Guzman et al. 2014) The implementation of this model is important, as the managers would get all the necessary information so that the problems can be solved that are present in the manufacturing process in a proper manner The primary feature of this model is that it can be used and implemented in almost all the kind of industries (Oker and Adiguzel 2015) Thus, TDABC has better features, which makes the model superior in nature when compared to the other models of costing system. Differences The TDABC model has differences as well when compared to the traditional system of costing. Additionally, it can be stated that there are major differences that are present between TDABC and ABC as well. The differences are as follows: ABC vs. TDABC system The method that is present in the ABC system is inaccurate in nature with respect to the American standards of accounting. The major areas for concern in the ABC system of costing is regarding the activities that takes place within the company and not on the expenses that the company is making (Rajabi and Dabiri 2012). On the other hand, the major concern in TDABC is regarding the identification of the capacities that are present within the departments of the company and the cost that is allocated by them towards those activities. It also helps in taking care after the capacity that is allocated with the groups of resources and the cost is also calculated that is based on the time for the activities to be performed. In the ABC model, the allocation of the costs is done on the different drivers that are present with it. The cost pool can be considered as the total cost that is related with the drivers and the activities, which affects the performance and the cost activities (Hardan an d Shatnawi 2013). In the TDABC approach, there is a declination in demand for the work within the departments and the processes that are present will help the production managers in computing the estimates in releasing the part of the resources. Thus, it can be implied that using the TDABC model will help in catching the various characteristics that are present in the cost activities and in the timeframe. The indirect costs that are assigned to the activity in the process of ABC will help in formulating the objective value that is present with cost. In TDABC model, the formulation of the equation can be done based on the cost and time that is needed with each of the activities (Emblemsvag and Bras 2012). Additionally, it will take in to consideration the six steps for the calculation process. TDABC vs. Traditional Approach The major differences in the in the traditional system of costing is that it is very easy to implement where as TDABC uses complex formats that are difficult for the organization to implement it. The traditional method of costing takes in to consideration the cost objectives and the resources that are being used in the process of manufacturing by the companies that help in estimating the cost of the various activities. On the other hand, in TDABC it can be seen that the activities of cost depends on the activities that are not taken up in the cost objectives (Rumble 2012). The management that is in the companies adopts the system of TDABC, as there are high levels of overheads along with the various miscellaneous items that are used within the companies. This can be done by using a reliable and an accurate system of management, which will help in managing the organizational costs in a better manner. However, the traditional system of costing uses the pool of single overhead that is o f no help in estimating the cost in a true manner. The costing system that is traditional in nature uses the object allocation in a arbitrary manner along with the labor and machine hours (Cooper 2017). The identification of the products that helps in estimating the expenses such as salaries and depreciation are included in the method of TDABC and in traditional method as well. Moreover, in the method of TDABC, the accountants also take in to consideration the cost of production that is based on the feedbacks received from the customers. The implementation of this method will help in decreasing the cost of production so that production can be increased (Cohen 2014). Suitability of TDABC The above discussion helps in identifying the major differences that are in TDABC along with its features. It is necessary to gain a better understanding of TDABC so that it can be used up in the manufacturing industry. The suitability of this method is as follows: This method helps the organizations in gaining a better knowledge with respect to the cost activities and helps the the company in taking the decisions by using the strategies that will help the manufacturing industry (Schulze, Seuring and Ewering 2012) The other benefit hat can be enjoyed by the organization after the implementation of TDABC is that it will help in illustrating the capacity to be used up and supplied. The process of calculating the time so that the different activities can be carried out in a better way. It will also provide support to the managers so that the costs can be managed in an efficient manner within the organization. This will result in providing better idea to the company with respect to the workloads that need to be increased in the different departments (Rumble 2012) It also results in taking in to consideration the Enterprise Human Resource Management Planning along with the cost calculation in an accurate manner so that it can help in proper transactions within the organization. TDABC can be implemented so that the cost of distribution can be calculated, which will help in building the relationship between the companies and the customers (Hoozie 2013 Most importantly, the companies are able to take better decisions through this model in a proper manner. It will help the companies in identifying the process of business, which are of complex nature so that the customers can be negotiated in an effective manner (Carli and Canavari 2013) The use of the TDABC model also helps the organization in the identification of the cost opportunities, which will help in increasing the entire production process. Moreover, the company will be able to increase its production capacity as well (Namazi 2016) This model can also be updated continuously with the operations that are being done by the company The discussion that has been done above will help in understanding the the utility of TDABC in the organizations. This model has to be taken up Uggs-N-Rugs so that the amount of output can be increased by lowering the cost of production. This will ensure that the efficiency level within the company can be increased. Conclusion Thus it can be concluded that TDABC is a new approach in the cost accounting methods within the organizations. 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