Validity Consumer Based Physical Activity -Myassignmenthelp.Com

Question: Discuss About The Validity Consumer Based Physical Activity? Answer: Introduction Cost accounting plays an important part in the organizations that are mainly in to manufacturing businesses. The process of cost accounting is where the recording, classification, summarization, allocation and evaluation of the various alternative courses so that it can help the organization in controlling the cost. This helps in decreasing the cost of the organization, which will help in increasing the level of profit (Weygandt, Kimmel Kieso, 2015). Most of the companies prefer to implement the various type of costing system like the Activity Based Costing (ABC), the costing system that is traditional in nature and others as well. In the current years, there has been an emergence of other system of costing such as the Time Driven Activity Based Costing, which is also known as TDABC. The traditional system of costing is used very commonly in most of the companies (Edmonds et al., 2016). However, in the current years, it can be seen that most of the organizations are facing serious i ssues in using the costing system that is traditional in nature. This has helped Robert Kaplan and Steven Anderson in developing the TDABC in 2004 so that it can help the companies in overcoming the barriers that are present in the costing that are traditional in nature and in ABC (Garrison et al., 2015). The primary aim of this report is that it will help in the analysis and the evaluation of the different aspects of TDABC and its suitability for its implementation. The report also details the features, description, and comparison with ABC along with TDABC. Description of client The consultancy firm has a client that manufactures ships for the defense and specializes in construction and designing the ships. The name of the company is Austal Ltd. who also specializes in high-speed passenger ferries and offshore wind farms as well. Within the operation of Austal Ltd., it can be seen that variance is present in the manufacturing process. The CEO of the company has considered adopting and implementing TDABC in the process of manufacturing so that the variances that are having negative effects within the organization can be identified. Time Driven Activity Based Costing (TDABC) The concept regarding TDABC has been developed so that it can help in overcoming the difficulties that are present in ABC and the approach of costing that is traditional in nature. Under this process, the cost of the resources shows that it is assigned directly with the object of the cost by taking in to consideration two estimates, which are 1) the per time unit cost for the supply of the resources capacity and activities of cost, and 2) the estimate regarding the unites of time that is required, which will help in the performance of the activity. The calculation of the activities regarding cost with respect to TDABC can be done through six steps that are as follows: This helps in the identification of the activities or the services Then the total costs need to be estimated for the resource groups Following which the capacity of the practical time can be estimated for the resource groups The calculation has to be done for the resource groups Time has to be determined for each of the activities Lastly, the cost of the unit of the resource groups has to be multiplied by the time that has been estimated for the activities (Kaplan, 2014). Features With respect to TDABC, it can be seen that the costing approach also has some features, which are as follows: Under the TDABC process, it is easy for the cost accountants to allocate costs to the various activities that are required in the manufacturing business. Additionally, this also takes lesser amount of time (Oker Adiguzel, 2016) The TDABC can be integrated as well with the help of the available or the existing system of Enterprise Resource Planning (ERP) so that it can help in boosting the process of manufacturing in the firms (Kaplan et al., 2014) It also helps the production managers in generating the monthly reports related to operational activities in an accurate manner with the help of TDABC The system of costing that is present under TDABC is more efficient than ABC and the costing system that is traditional in nature, which helps in the proper utilization of the capacity of the manufacturing firms TDABC can be implemented so that it can help the production managers in forecasting the demands in an effective manner (Johnson, 2014) It also helps in doing the changes within the models of costing in an inexpensive manner (Johnson, 2014) It can also be implemented in the important information so that the managers can use it to solve the problems related to the process of manufacturing in a better way The main feature of TDABC is that it can be implemented and used in any kind of industry (Oker Adiguzel, 2016) These features of TDABC helps in providing superiority to the system of costing when compared with other costing systems. Differences TDABC also has some major differences with respect to the costing system that is traditional in nature. At the same time, these differences can be seen between ABC and TDABC as well. The main differences are as follows: ABC vs. TDABC system The ABC method is a system that is not accurate enough according to the accounting standards of America. The primary concerned area in the ABC costing is related with the term of activities that happens within the organization rather than the expenditure of the company (Christopher, 2016). On the contrary, the major concerned area for TDABC is associated with the identity of the capacities of the departments that are present within the organization and the cost that is allocated by the departments towards each activity. It also looks after the capacity of the resource groups and the cost that is based on the time for the performance of the activities. In this process of ABC, the costs are all allocated with the various types of drivers that are associated with the cost as well. The pool of cost is regarded as the entire cost that is associated with the activities and the driver that helps in affecting the performance and the activities of cost (French et al., 2016). With respect to T DABC, the decline in the demand of the work in a department along with the processes that are present in TDABC helps the managers in making an estimation regarding the release of a certain quantity of resources. This helps in implying that TDABC helps in capturing the different characteristics of the activities of cost with respect to the timeline. The costs that are indirect in nature are assigned with the activities of cost under the ABC process so that it can help in determining the value of objectives that is associated with cost. With respect to TDABC, the equation can be developed by assigning the time and cost that is required in each activity (Kaspina, Khapugina Zakirov, 2014). Moreover, in both the cases, there are six steps that are required in the process of calculation. TDABC vs. Traditional Costing Approach The difference between these two is that the traditional system of costing is rather simple in approach where as the TDABC is complex in nature. Under traditional system of costing, the objectives of cost is required along with the resources that has been used up, which helps in the evaluation of the different activities of cost but in TDABC, it is seen that the cost activities are dependent on the activities that are not associated with the objectives of cost (Miskowicz, 2015). Most of the management that is present in the firms helps in adopting the TDABC system with respect to the higher level of overheads and the number of miscellaneous items that are taken up by the organization. This requires an accurate method and a reliable mode of management so that the cost of the organizations can be managed. Nevertheless, with respect to costing system that is traditional in nature, the single overhead pool is used, which does not help in the calculation of the true cost. The traditional process of costing system along with the allocation of the objects of cost in a random manner can be done based on the machine or labor hours (Daley Green, 2016). TDABC is also inclusive of the identifiable products, which also show the accumulation of other expenses as well such as depreciation, salaries and others as well, which can be seen in the costing system that is traditional in nature. Additionally, in TDABC, the accountants realize the production cost, which is based on the feedback of the customers. It also helps in the implementation of lowering the production cost so that the productivity can be increased (Lee, Kim Welk, 2014)). Suitability of TDABC The discussion above shows the major differences that are present in TDABC with respect to the features. It is also important to have knowledge of the TDABC so that it can be used in the manufacturing industries. The suitability of TDABC is as follows: It has the ability for creating the insights regarding the activities based on costs that are used by the companies. With respect to the traditional costing system, TDABC helps the companies in making the decisions based on strategies that will suit the manufacturing companies to run efficiently (Cooper, 2017). Another major benefit in implementing TDABC is that it helps in clarifying the supplied and the used capacity. The calculation process of the time that is required in carrying the various activities helps in the connection between the managers with that of managing the costs of the company. This helps the company in getting a better insight regarding the departments where the workload needs to be increased (Oker Adiguzel, 2016). This system also helps in covering the Enterprise Resource Planning and the calculation of the costs are accurate so that the transactions within the companies. The implementation of TDABC will help in calculating the distribution costs so that it can help in empowering the relationship between the customers and the companies (McLaughlin et al., 2014) Importantly, it also helps in managing the companies so that it can lead to make the decisions in a correct manner. The companies will be able to identify the business processes that are complex in nature so that the negotiation with the customers can be done effectively (Emmett Crocker, 2016) This model also helps the organizations in identifying the opportunities of cost so that the level of efficiency can be increased within the entire process of production. Additionally, it also helps the company in increasing the capacity of production (Cooper, 2017) The model of TDABC can also be updated easily with respect to the operations that are being carried out in the company The above mentioned discussion helps in understanding the usefulness of the TDABC within the companies. This model needs to be taken up by Austal Ltd., which will help in increasing the output amount by decreasing the production cost, which will help in increasing the level of efficiency within the entire process of production. The management will also be able to get a proper picture about the cost structure that is present within Austal ltd. so that the integration can be done through TDABC in comparison with the enterprise resource planning and other factors. Thus, the discussion above with respect to TDABC will be suitable for Austal Ltd. Conclusion Therefore it can be concluded that the use of TDABC is a modern approach with respect to cost accounting in the companies. The features that are present in this model will help in assigning the costs to the various activities and integrate it with the ERP system that is present within the organization. The differences between ABC and TDABC show that the latter is superior, which will help the company in calculating the cost of overheads along with the number of products. Reference List Christopher, M. (2016).Logistics supply chain management. Pearson UK. Cooper, R. (2017).Target costing and value engineering. Routledge. Daley, B., Green, B. (2016). An Information?Based Theory of Time?Varying Liquidity.The Journal of Finance,71(2), 809-870. Edmonds, T. P., Edmonds, C. D., Tsay, B. Y., Olds, P. R. (2016).Fundamental managerial accounting concepts. McGraw-Hill Education. Emmett, S., Crocker, B. (2016).The relationship-driven supply chain: creating a culture of collaboration throughout the chain. CRC Press. French, K. E., Guzman, A. B., Rubio, A. C., Frenzel, J. C., Feeley, T. W. (2016, September). 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