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Resource Consumption Accounting Essay

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Below is an essay on "Resource Consumption Accounting" from Anti Essays, your source for research papers, essays, and term paper examples.

1. Introduction

THE ROLE OF MANAGEMENT ACCOUNTING is to provide tools and information for planning, monitoring and controlling enterprise performance and effective decision support. Management’s ability to achieve the companies’ strategic objectives during the conversion of resources into saleable products and services directly depends on the quality of the data Management Accounting provides. Resource Consumption Accounting (RCA) is a superior management accounting approach that provides benefits not achievable through traditional U.S. Management accounting approaches.

How effectively do you manage your organization with the information you have? In the 1980’s publication Relevance Lost, Johnson & Kaplan pointed out that U.S. management accounting did not meet the requirements to operate a company. Not much has changed since according to a 2003 IMA and Ernst & Young Survey. Some 2,000 CFO's and controllers reported: 80% cost management is important to their organizations’ strategic goals and yet confirmed that 98% [of their] cost information is distorted citing too many overhead allocations. The Consortium for Advanced Management International–RCA Interest Group survey confirmed 80% of U.S. companies still use traditional standard costing, which may account for only 23% being satisfied with their decision support information. (Merwe,2011)

So, a change in accounting system was required.
[2]However, change comes slowly, especially when the alternative approaches are unfamiliar, somewhat confusing, and offer costing solutions from such divergent perspectives.

For example, proponents of activity-based costing (ABC) base their arguments on the view that all costs, even the cost of capacity, are variable in the long-term.   The ABC model captures this variability by assigning costs to products in proportion to each product’s expected long-term demand for costly resources.   On the...

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MLA Citation

"Resource Consumption Accounting". Anti Essays. 15 Dec. 2018


APA Citation

Resource Consumption Accounting. Anti Essays. Retrieved December 15, 2018, from the World Wide Web: http://parimatch-stavka7.com/free-essays/Resource-Consumption-Accounting-529767.html

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