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  • Based on simple understanding, when organizations identify multiple cost drivers and implement the drivers purposefully for the performance measure to manage its activity, the approach is known as Activity-Based-Management (ABM) (FriedMan, P.136). The applied ABM technique diverse the basic of ABC through separating the task of product costing through the use of activity based relationships. The ABA varied principles and philosophies advocate for the system applicability to government agencies, the processing industries and the service companies (Kaplan, P. 77). The aim or agenda of using the ABA approach in the mentioned institution tends to maximize the value adding activities while it inhibits the possibility on non-value adding activities from arising. The model draws its support from the ABC as a system of information that reducing costs in the organization, creating performance measures for the labor force in the company, improving on the level of cash flow and value products that are of quality (Seatjoy company, P.455).

Based on simple understanding, when organizations identify multiple cost drivers and implement the drivers purposefully for the performance measure to manage its activity, the approach is known as Activity-Based-Management (ABM) (FriedMan, P.136). The applied ABM technique diverse the basic of ABC through separating the task of product costing through the use of activity based relationships. The ABA varied principles and philosophies advocate for the system applicability to government agencies, the processing industries and the service companies (Kaplan, P. 77). The aim or agenda of using the ABA approach in the mentioned institution tends to maximize the value adding activities while it inhibits the possibility on non-value adding activities from arising. The model draws its support from the ABC as a system of information that reducing costs in the organization, creating performance measures for the labor force in the company, improving on the level of cash flow and value products that are of quality (Seatjoy company, P.455).

Managing Cost and Quality

The managerial accounting in the current corporate society has undergone a veritable renaissance since 1980 having been pioneered by Professor Robert Kaplan. The scholar, Kaplan, work led to the realization of Activity Based Costing (Yoram, P. 47). The innovation of Activity Based Costing (ABC) is an important tool for the organizations in managing the company costs and quality of products. It is the ABC data that enables organization managers to start structuring plans of improving the cost and quality of the activities. The ABC technique poses as a right solution to the problem of the obsolescence regarding the traditional costing. According to Miller, a scholar, the ABC functionality approach determines the survival of an organization in the market industry depending on how the competition is designed through the use of activity and process (Miller, P. 2).

Based on simple understanding, when organizations identify multiple cost drivers and implement the drivers purposefully for the performance measure to manage its activity, the approach is known as Activity-Based-Management (ABM) (FriedMan, P.136). The applied ABM technique diverse the basic of ABC through separating the task of product costing through the use of activity based relationships. The ABA varied principles and philosophies advocate for the system applicability to government agencies, the processing industries and the service companies (Kaplan, P. 77). The aim or agenda of using the ABA approach in the mentioned institution tends to maximize the value adding activities while it inhibits the possibility on non-value adding activities from arising. The model draws its support from the ABC as a system of information that reducing costs in the organization, creating performance measures for the labor force in the company, improving on the level of cash flow and value products that are of quality (Seatjoy company, P.455).

Work Cited

FriedMan, Anthony. Success and Failure of Activity –Based Technique. 2013. CIMA.

Miller, John. Implementing the Activity Based Costing in Daily Operations. 2013. Exhibit 1-1, John Wiley & Sons, Inc.

Kaplan, Robert. Cost and Effect. 2013. Harvard Business Press.

Seatjoy company. Information from Boeing is Chocking on Airbus. Will this Idea really fly? 2014. Business Week.

Yoram, Eden. Activity Based Costing and Activity Based Management. 2012. The Same Thing in a Different Guise.