StudentShare
Contact Us
Sign In / Sign Up for FREE
Search
Go to advanced search...
Free

Activity-Based Cost Reduction Information in Governance - Coursework Example

Cite this document
Summary
The author of this coursework "Activity-Based Cost Reduction Information in Governance" focuses on the activity-based costing. According to the text, it refers to an approach of allocating expenses in relation to resources consumed during the task of producing each of the products of services…
Download full paper File format: .doc, available for editing
GRAB THE BEST PAPER95.4% of users find it useful
Activity-Based Cost Reduction Information in Governance
Read Text Preview

Extract of sample "Activity-Based Cost Reduction Information in Governance"

 How Board and Audit Committee Utilize Activity-Based Cost Reduction Information in Governance Activity- based costing refers to an approach of allocating expenses in relation to resources consumed during the task of producing each of the products of services (Carver, 2011). When using this technique, the managers are able to assign both direct and fixed cost to each of the task in production of the products or services (Firstenberg and Schoff, 2009). The auditors are responsible for establishing the extent in which the company’s board or managers have achieved their production goals.

The auditors will achieve their goals by comparing the actual performance with activities planned by the organizational managers or board. The board members are responsible for setting the organization’s goals and strategies to achieve them within the given period (Carver, 2011). This requires board members to have full information concerning products and services they intend to produce. The board members are responsible for budgeting for the resources the organization will require in the production of specific commodities.

The information about resources required for the production process is essential because the board is aware of exactly what to produce in terms of quality and number of units of each product they will produce (Firstenberg and Schoff, 2009). The information also relate to the time in which the board members expect to raise the required resources and when they will complete the production process. The board will be able to determine the area of shortage of resources for the completion of the production task for each activity or service and will decide whether to reduce the number of units to be produced for each commodity or whether to add more resources in order to produce the targeted quantity (Carver, 2011).

Since charitable organizations aim at meeting specific needs of the society, activity-based costing will help the board members to establish a base for mobilizing more resources from financiers of the organization to provide essential goods and services in the society. The work of auditors is to obtain proof of the efficiency in which organization has utilized its resources. The auditors use activity-based costing information set by the organization’s board to make comparison of what the board has actually produced in relation to what the board had planned to produce (Carver, 2011).

The auditors will attest the value of each product or service in relation to the expenditure set by the board. The auditors have a duty to match the quality of products or services with the resource used in producing those commodities. Since the man aim of the charitable organizations is to serve a specific role in the community, auditors will be able to determine whether the products or services produced by the organization serve specific interest of the public (Firstenberg and Schoff, 2009).

The management should ensure that the resources are utilized efficiently by applying the most competent approaches in their production activities. In conclusion, determining the value of the product based on the cost incur in the production process for each item is beneficial for both board members and the auditors. It helps the board members to decide the most efficient production process. The board members are able to set a target of the amount of each product, or service they will produce based on the available resources.

This is also beneficial to the auditors who can effectively compare the efficiency in which an organization has utilized its resources during the production process. ReferencesCarver, J. (2011).Boards that Make a Difference: A New Design for Leadership in Nonprofit and Public Organizations. John Wiley & Sons. 448 pagesFirstenberg, P. B. and Schoff, R. (2009). The 21st Century Nonprofit: Managing in the Age of Governance (2nd edition): ISBN-13:9781595422491. 336 pages

Read More
Cite this document
  • APA
  • MLA
  • CHICAGO
(“Activity-Based Cost Reduction Information in Governance Coursework”, n.d.)
Activity-Based Cost Reduction Information in Governance Coursework. Retrieved from https://studentshare.org/management/1612277-critical-issues-written-assignment-5
(Activity-Based Cost Reduction Information in Governance Coursework)
Activity-Based Cost Reduction Information in Governance Coursework. https://studentshare.org/management/1612277-critical-issues-written-assignment-5.
“Activity-Based Cost Reduction Information in Governance Coursework”, n.d. https://studentshare.org/management/1612277-critical-issues-written-assignment-5.
  • Cited: 0 times

CHECK THESE SAMPLES OF Activity-Based Cost Reduction Information in Governance

Regulatory and Economic Environment: China

In an internationalized economy, up-to-date accounting and auditing knowledge and skills are the basic institutional infrastructure for private enterprises as well as government agencies to promote good corporate governance and sound public management.... The Chinese financial catastrophe showed that insufficient accounting practices and lack of transparency in financial information still prevail in the region.... Usual accounting may no longer adequately reflect the necessary information from the position of regulatory and internal corporate control....
5 Pages (1250 words) Essay

Corporate Governance and Financial Statements

This paper "Corporate governance and Financial Statements" will provide a comprehensive overview of the various performance measures that need to be considered in order to perform a financial analysis of a firm.... Reporting of Corporate governance issues has recently attracted a lot of attraction and firms besides communicating with their stakeholders in other forms also use financial statements as a tool to communicate their performance against corporate governance goals....
6 Pages (1500 words) Coursework

Critical Issues Module 2 Paper

Performance management and activity-based cost reduction models is the key to success of every organization.... For organizations to achieve success… Organizational workers should also get training in their jobs (Firstenberg, 2009). Organizations use activity based costs to minimize costs through a management process where they Though these activities may be short-term, activity based cost reduction activities should provide a better alternative for cost management of the ongoing activities....
4 Pages (1000 words) Coursework

Various Changes That HaveTaken Place in the Field of Management Accounting

This is because it is used in developing strategies for cooperate performance, budgeting, good organizational governance system, risk management, internal controls, and ethical financial reporting.... Under this definition, it is possible to denote that management accounting is an important tool that managers It serves an important role of providing financial information that policy formulators can use in improving the efficiency of a business organization (Garrison, Noreen and Brewer, 2010)....
9 Pages (2250 words) Essay

Importance of Institutional Investors for Financial Markets

An essay "Importance of Institutional Investors for Financial Markets" claims that the importance of institutional investors in the financial market is that they enhance reduced information asymmetry, promote quality corporate governance, improve liquidity, and increase share prices.... The importance of institutional investors in the financial market is that they enhance reduced information asymmetry, promote quality corporate governance, improve liquidity, and increase share prices and value in the financial markets (Sias et al, 2006)....
8 Pages (2000 words) Essay

Ethic, Governance and Accountability

The author of the "Ethics, governance, and Accountability" paper studies the role of company vis-à-vis, the employees as stakeholders.... As an externalizing agent, the corporation maximizes its profit at the cost of any or all of its stakeholders—the employees, the suppliers, the environment, shareholders, and the consumers.... The product is priced by the corporation based on the demand-supply situation or on a cost derived out of its brand power....
9 Pages (2250 words) Coursework

Various Types of Companies in the United Kingdom

But at the same time, there are strict regulations to be followed in the UK, public disclosure of financials and relevant information as well as a loss of control exists.... At the same time, there is no need for disclosure of any kind of information.... But now a new range of inputs have arrived with the evolvement of globalization, segmentation and more internal services and have become the new cost drivers....
7 Pages (1750 words) Coursework

Human Resources and Information Technology in OTD Inc

This is an enormous burden on an operational budget when pressures to expand are being created from governance officials.... A flatter management hierarchy with improved self-governance software would remove the considerable payroll burden from OTD and further benefit its technology innovation presence in multiple markets.... Though there are other human behavioral and personality needs present, these are universal concepts that are applicable in most like culture governance systems....
8 Pages (2000 words) Case Study
sponsored ads
We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.
Contact Us