Activity Based Costing Case Study
2.4 Problems face in implementing Activity Based Costing During the process of implementing the ABC in one firm may face a lot of problems such as technical factor and behavioral factor. As for behavioral factor, the implementation of ABC may cause the employee job to be duplicated due to the differences between ABC and GAAP system that need separate operation. This may lead to the unsatisfied behavior of the employee that need to work more as the ABC is implied, this will also cause the decrease in employee efficiency. When the employee efficiency reduced, the firm productivity may also reduce which gives a big impact on the firm performance. In addition, the implication of the ABC in one firm may face the problem such as lack of expertise
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This is because they need to prepare sufficient resources like money, manpower and others to support this system. It consumes a lot of time in preparing those resources. Besides, during implementing process they must also take time to rearrange all the information needed and enter it one by one into the system in order for it to work. This is due to the ABC system is different from the others. Lastly, lack of support from the management level is also one the problem may face in implementing the ABC. This means that the manager did not place enough focus on the implementation when they set their budgets. This causes the implementation process could not run smoothly due to the lack of accountancies, and technician to maintain the operation of ABC system. Besides, lack of support from the management level will also cause the employee having less confidence to apply the new …show more content…
Walmart has investment outside the area of America, the company successfully operates at others countries such as United Kingdom, South America and China, while the company in Germany and South Korea are fail. Walmart reputation is selling product at low price.
2.6 How Activity Based Costing affect Walmart to become successful Walmart has applied ABC in their costing management. The implementation of the ABC in Walmart is positively affected the organization and make it became more successful. We can see in it through their performances over the years they implement this system. By implementing the ABC system in Walmart it helps to maintain its record of the low-price leadership among the retailers. This is due to the efficiency supply chain of the Walmart which makes its margin always stay far lower than their competitors. Efficiency in supply chain by using ABC causes the process of getting supplies become less time consuming and more efficient use of supplies. For example, the supplies are being delivered when it is needed. So, the retailers no need to prepare warehouse to keep those supplies. Thus, it efficiency helps to save a lot of operating cost which made Walmart become the price-lead
This is because they need to prepare sufficient resources like money, manpower and others to support this system. It consumes a lot of time in preparing those resources. Besides, during implementing process they must also take time to rearrange all the information needed and enter it one by one into the system in order for it to work. This is due to the ABC system is different from the others. Lastly, lack of support from the management level is also one the problem may face in implementing the ABC. This means that the manager did not place enough focus on the implementation when they set their budgets. This causes the implementation process could not run smoothly due to the lack of accountancies, and technician to maintain the operation of ABC system. Besides, lack of support from the management level will also cause the employee having less confidence to apply the new …show more content…
Walmart has investment outside the area of America, the company successfully operates at others countries such as United Kingdom, South America and China, while the company in Germany and South Korea are fail. Walmart reputation is selling product at low price.
2.6 How Activity Based Costing affect Walmart to become successful Walmart has applied ABC in their costing management. The implementation of the ABC in Walmart is positively affected the organization and make it became more successful. We can see in it through their performances over the years they implement this system. By implementing the ABC system in Walmart it helps to maintain its record of the low-price leadership among the retailers. This is due to the efficiency supply chain of the Walmart which makes its margin always stay far lower than their competitors. Efficiency in supply chain by using ABC causes the process of getting supplies become less time consuming and more efficient use of supplies. For example, the supplies are being delivered when it is needed. So, the retailers no need to prepare warehouse to keep those supplies. Thus, it efficiency helps to save a lot of operating cost which made Walmart become the price-lead