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    Strategic Management Accounting

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    Nur Are Xieyra
    1) The document discusses HP's implementation of activity-based costing (ABC). It describes how HP analyzed its accounting system and assigned costs to products based on resource usage. 2) HP grouped costs into cost pools for activities like manufacturing panels and loading parts. It identified cost drivers like number of parts to assign costs to products. 3) By implementing ABC, HP was able to get more accurate and reliable measurements of activity costs, provide more relevant product costs, and better measure profitability.

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    Strategic Management Accounting

    Uploaded by

    Nur Are Xieyra
    58 views6 pages
    1) The document discusses HP's implementation of activity-based costing (ABC). It describes how HP analyzed its accounting system and assigned costs to products based on resource usage. 2) HP grouped costs into cost pools for activities like manufacturing panels and loading parts. It identified cost drivers like number of parts to assign costs to products. 3) By implementing ABC, HP was able to get more accurate and reliable measurements of activity costs, provide more relevant product costs, and better measure profitability.

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    1) The document discusses HP's implementation of activity-based costing (ABC). It describes how HP analyzed its accounting system and assigned costs to products based on resource usage. 2) HP grouped costs into cost pools for activities like manufacturing panels and loading parts. It identified cost drivers like number of parts to assign costs to products. 3) By implementing ABC, HP was able to get more accurate and reliable measurements of activity costs, provide more relevant product costs, and better measure profitability.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    58 views6 pages

    Strategic Management Accounting

    Uploaded by

    Nur Are Xieyra
    1) The document discusses HP's implementation of activity-based costing (ABC). It describes how HP analyzed its accounting system and assigned costs to products based on resource usage. 2) HP grouped costs into cost pools for activities like manufacturing panels and loading parts. It identified cost drivers like number of parts to assign costs to products. 3) By implementing ABC, HP was able to get more accurate and reliable measurements of activity costs, provide more relevant product costs, and better measure profitability.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    of 6

    ADVANCE MANAGEMENT ACCOUNTING

    STRATEGIC
    MANAGEMENT
    ACCOUNTING
    LECTURER: DR.SHARUL EFFENDY BIN JANUDIN
    PRESENTED BY:
    NURUL ATIKA BINTI NORSHAM
    NOOR HIDAYU BINTI HASSAN
    NUR FARAHLIANA AQMAR BINTI LASIM
    NOR AZIRA BINTI ISHAK
    NOOR IZZATI BINTI ADZMI
    BACKGROUND

    FOUNDED BY :
    BILL HEWLETT AND DAVE PACKARD

    YEAR:
    1939

    FIRST PRODUCT :
    AUDIO OSCILLATOR

    FIRST CUSTOMER :
    WALT DISNEY

    *HP ENTER THE COMPUTER MARKET WITH THE HP 2116A IN 1966


    HP IMPLEMENTATION ON ABC APPROACH

    BEFORE PROGRESS AFTER


    • THE OLD SYSTEM DID NOT • USED DETAILED ENGINEERING
    PROVIDE USEFUL ANALYSIS TO CHANGE ITS
    • THE ENGINEERS AT RND
    INFORMATION
    ACCOUNTING SYSTEM AT MANY OF ITS REALIZED THAT ABC WAS
    FACTORIES, CLAIMING THAT BECAUSE
    • MANAGERS COULD USE TO CHEAPER TO USE AUTOMATIC
    COMPARE AND EVALUATE THE ABC COSTING ASSIGNS COST TO
    INSERTIONS THAN MANUAL
    PRODUCTION COSTS OF PRODUCTS, SERVICES AND ACTIVITIES
    DIFFERENT DESIGN. BASED ON THE USAGE OF RESOURCES, ONES.
    THEIR MANAGERS CAN GET
    BETTERESTIMATES OF COSTS AND
    COST TRADE-OFFS.

    Secure Distributed Systems


    ACTIVITY BASED COSTING

     COSTING METHOD THAT ASSIGNS OVERHEAD


    AND INDIRECT COSTS TO RELATED PRODUCTS
    AND SERVICES.

     RECOGNIZES THE RELATIONSHIP BETWEEN


    COSTS, OVERHEAD ACTIVITIES AND
    MANUFACTURED PRODUCTS, ASSIGNING
    INDIRECT COSTS TO PRODUCTS LESS
    AEBITRARILY THAN TRADITIONAL COSTING
    METHOD.
    Secure Distributed Systems
    STEPS INVOLVED IN THE ABC APPROACH

    1. Identify major activities


    Manufacturer of software and computer services

    2. Group costs of activities into cost pools


    Panel SMT Pre-wave Post-Wave Test/ Repair
    Process Loading Hand Hand
    Loading Loading

    3. Identify measures of activities cost drivers


    Panels SMT Parts Pre Wave HL Post wave HL T/R Time
    parts parts

    4. Release costs to products


    BENEFITS OF ACTIVITY-BASED COSTING TO SUPPLY
    CHAINS

    RELIABLE AND VALID


    EASIER AND MORE
    MEASUREMENTS OF
    ACCURATE ACCESS TO
    ACTIVITY-RELATED
    RELEVANT COSTS
    COSTS

    MORE RELEVANT AND


    INFORMATIVE
    PRODUCT COSTS,
    WHICH RESULT IN
    BETTER
    PROFITABILITY
    MEASUREMENTS
    Secure Distributed Systems

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