Allocating Fixed Costs and Budgeting
Case Assignment
This case has two separate parts.
Part I
How can activity-based management and activity-based costing (ABC) benefit an organization? Specifically, address the following points.
• How does ABC differ from other allocation methods?
• Describe the main characteristics of ABC.
• What type of companies tends to benefit from ABC?
• Comment on a company (research Internet) that has implemented ABC.
o What type of company is it?
o Was it successful?
Part II
Please answer the following questions.
• What are the general benefits of preparing the budget?
• Discuss how the budget is likely to be used for the control function.
• Variance analysis is a traditional tool used for planning and control. Comment on advantages and disadvantages of using this approach for performance evaluations.
• Do you have any suggestions for complementary or alternative performance measures?
The submission should be 3 to 5 pages and need to include answers to all the questions listed above. Include references in APA format.