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JAMAR

Vol. 7 · Number 2 · 2009

Recognition of Idle Resources in Time-Driven Activity-Based Costing and Resource Consumption chronicle Models
Michael S.C. Tse* Maleen Z. Gong** consider Despite its theoretical superiority over handed-down volume-based cost models, the Activity-Based Costing (ABC) modelhas failed to replace traditional volume-based be models in to the highest degree organizations. In response to the problems of the model, Time-Driven Activity-Based Costing (TDABC) and Resource Consumption Accounting (RCA) models have been developed as costing models for next extension cost management systems. A key feature that distinguishes TDABC and RCA models from traditional volume-based costing models and the ABC model is the recognition of stagnant resources in resource pools. This paper presents a discussion on implications of recognising idle resources in TDABC and RCA models on developments, maintenance and uses of cost management systems. A hypothetical case is presented to illustrate conversions of an ABC-based costing model to ones that be based on the TDABC and RCA models, and the resulting new allocation of resource costs.

Introduction
shrewd and maintaining effective cost management systems is a fundamental line for management accountants.



In recent decades, advances in information engineering science have brought significant improvements to the collection and communication of cost data in organisations. Unfortunately, traditional volume-based costing models (absorption costing and variable costing) do not make good use of available data. These costing models are based on simplified assumptions of cost behaviour, and are designed to cope with limited availability of data (Cooper and Kaplan, 1988). They employment well when organisations operate in a stable environs with low variability in outputs. As the complexity of an organisations operations increases, weaknesses of these costing models become more spare (Cooper, 1987; Drury, 1990). The Rise and Fall of...If you want to get a safe essay, order it on our website: Ordercustompaper.com



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