What the disadvantages of traditional product costing system

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Reference no: EM131710674

Management Accounting-

You are required to prepare answers to the essay questions.

Task 1. Many firms realise that there are fundamental problems with the methods they use to cost their products or services. But should they change from traditional product costing methods to activity-based costing (ABC) methods? It is important first of all to understand the limitations of existing product costing systems in today's competitive environment typified by a diverse product line populated by many low-volume complex products.

Required -

1. What are the disadvantages of traditional product costing systems that they no longer meet the needs of today's managers?

2. How does the cost structure of most manufacturing firms today differ from their cost structure of 20 years ago?

3. What caused this change in cost structure?

4. Why can't traditional product costing systems account for costs of product diversity? Volume diversity? Product complexity?

Task 2. Compare and contrast Balanced Scorecard with financial analysis and explain why Balanced Scorecard is more appropriate for analysing entity's performance than financial analysis?

Task 3. Describe disadvantages associated with budgeting in management performance evaluation. Explain remedies for improving the use of budgeting in evaluating management performance.

Reference no: EM131710674

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len1710674

11/7/2017 7:37:36 AM

You are required to prepare answers to the essay questions set out in tasks 1 to 3 in the table below. You must use appropriate academic peer reviewed literature to support your arguments and you must also, where appropriate, use self-generated financial data to help explain your ideas.

len1710674

11/7/2017 7:37:31 AM

Notes - You are required to prepare a fully referenced assignment (3,000 words). Word count at the end of the essay before the list of references (i.e. the word count excludes the references and exhibits). Write a brief introduction in task 1 and in task 2 and in task 3. The references should come from journals (google scholar or another) and the quality is important of the journals (by looking at the top rank of journal and looking at Cited by good number) and the dates of issue should not be old and use Harvard referencing style.

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