No business is successful if there is no planning. Every business needs planning. There for this article explains how important activity-based planning is for nay business. For this purpose, scientists and practitioners suggest that every business should have system for planning and budgeting. This paper explains view of the factors that agriculture should uses activity based planning. It is also important that farmers agricultural industry use activity based planning and budgeting. The key objective of this paper is to present the budgeting system as an important tool in planning and managing the business of an agricultural enterprise (Ramune, 2008).
Activity based budgeting and management has brought many advantages to small business as well as large scale business, industries. with the rapid change of today’s economic environment, advanced technology, and the requirements of the modern enterprise’s management force companies produce and supply its products at the lower price than its competitors do. This article explains in detail integration of activity based panning and management to other accounting practices an process followed in any business. There are some limitation associated with the ABC. This paper explains how these limitation can be overcome. Also Author focuses on model of framework which is integration between business sand activity based planning (Andrew, 2005).
In activity based planning and budgeting both financial and operational process and systems is involved. Demand for resources is related to resource availability; capacity overages and shortfalls are corrected. Activity-based budgeting is derived from the outputs of ABP.ABP is a subset of longer process. Activity bases planning makes sure that resources and process set in business are correctly used in best interest of the business’ makes sure that business operations are running smoothly, there is less cost associated with each unit, reduction of cost is happening, ABC also make sure that productivity and efficiency is increasing. As a manager In order to implement activity based costing I make sure that I identify cost. It is most important step in the process of activity based costing. I determine cost for inventory, warehouse, research cost etc. Once cost is identified I load cost pool. This is cost that occur outside of the company, these cost are related to products and services. Use a data collection system to collect information about the activity. Once I have all the necessary information I Convert the results of the ABC system into reports for management consumption. Most important factor in ABC is that manager reduce quantity and cost to product (Tandun, 2013).
References
Andrew, H. (2005), “Activity-based Costing and Activity-based Management - A Profitability Model for SMEs Manufacturing Clothing and Textiles in the UK”, Journal of Fashion Marketing and Management, Vol. 9 No. 1, 2005 pp. 8-19.
Ramune, P.(2008). Activity based budgeting. Alytus City Municipality Administration Vol.4, No. 2, 2008.
Tandun, H.(2013).Integration of activity-based budgeting and activity-based management. International Journal of Economics, Finance and Management Sciences. 1(4): 181-187.
Prabhu Boppana - Wednesday, 5 August 2020, 1:17 PM
Number of replies: 8
ABC analysis:
According to materials management, ABC analysis is defined as an inventory categorization technique. It also divides an inventory into three different categories. Here ‘A items’ defines with very control, accurate and tight records, ‘B items’ with good and less tight controlled records and ‘C items’ will be the minimal and simplest controls records (Hoozze & Hansen, 2014).
It allows purchasing and inventory managers for managing and segregating the overall suppliers and inventory in three different groups. It also allows different supplier and inventory management techniques for applying their segments to increase or decrease their revenue and costs (Askarany, 2011).
According to my perception ABC acts as a critical inventory management tool for classifying the costs of inventory items based on their consumption and production values. Here it has a value according to their time period. It also helps to categorize using the special mechanisms related to crude prioritization for concentrating their resources and efforts on it (Kont & Jantson, 2011).
Master Budgeting:
It is defined as the aggregation of low-level budgets that are produced by functional areas of various organizations and companies. It also includes different budgeted financial t also serves as a motivation tool based on the employee by comparing their budgeted performance with their actual performance (Fei & Isa, 2010).
It also helps their staff in getting good contribution and job satisfaction for growing the business levels up. Beginning of the master budgeting is starts with a sales budget. Here sales budget helps the rest of budgeting process because the cash needed for production and level of production is dependent on the level of forecasting sales (Grandlich, 2004).
According to my perception master budgeting helps as a motivating tool and it will sum all the divisional budgets into one. It also includes loss and profit in budgeted and forecast the cashflow. It also helps to maintain a prompt balance sheet with income statement through placing financial budgets as well as the income statement (Hoozée & Hansen, 2017).
References
Askarany, D. (2011). Interaction between Target Costing and Activity-Based Costing: Is Target Costing a True Costing Technique?. SSRN Electronic Journal. doi: 10.2139/ssrn.1888824
Fei, Z., & Isa, C. (2010). Factors Influencing Activity-Based Costing Success: A Research Framework. International Journal Of Trade, Economics And Finance, 1(2), 144-150. doi: 10.7763/ijtef.2010.v1.26
Grandlich, C. (2004). Using Activity-Based Costing in Surgery. AORN Journal, 79(1), 189-192. doi: 10.1016/s0001-2092(06)61152-6
Hoozée, S., & Hansen, S. (2017). A Comparison of Activity-Based Costing and Time-Driven Activity-Based Costing. Journal Of Management Accounting Research, 30(1), 143-167. doi: 10.2308/jmar-51686
Hoozze, S., & Hansen, S. (2014). A Comparison of Activity-Based Costing and Time-Driven Activity-Based Costing. SSRN Electronic Journal. doi: 10.2139/ssrn.2489118
Rajesh Sanku - Wednesday, 5 August 2020, 1:36 PM
Number of replies: 1
Activity Based costing and Master budgeting
Activity based costing (ABC) is the non-direct cost accounting method which identifies the activities in any organization and also assigns the cost of activity for all the products and services. This method is more precise in allocating the overhead costs to assign for the activities. It targets the reduction of overhead costs. Direct material, direct labor costs are easily traced to the product division because they are direct costs. Non-direct costs easily traceable that allocate and use the overhead products like machines hours and labor hours which drive all the costs, (Steimer, T. E.1990). Manufacturing overhead is allocated to the product based on the activity to determine the predetermined overhead rate which is divided by the activity level. This method assumes the driving overhead activity is the labor hours.
According to the author’s (Kaplan, R. S.1991) view Activity based cost accounting disagrees with the particular model of resources (overhead) are consumed by the product (i.e.) products are assumed by the resources. The things that consume resources are activities and products consume activities. Basically, the resources are the one which are directly turned into products. The assumptions are not the products are created equal, also there might be different quantities of products which use many or few parts. Products consuming resources is the key thing to determine the activity to consider certain consumed activities specifically at their batch level.
Master budgeting
Budgeting is the most widely used management accounting tool throughout the world by many companies and individuals and can be benefitted from user resources and not to get out of control. It covers to be in specific amount of time to use the resources and express all the plans to reach the goals. This helps in planning, acting, control and developing all the strategies. This allows to take the corrective actions and start all over if needed which is an ongoing process to create the long-term goals and putting plans into action to analyze the results to be correct each time. Annual budget is basically divided into multiple quarters to achieve high accordingly. This enable management to react quickly and make deviation in the plans based on the feedback obtained to achieve the results desired (Cox, P.2014). It is also used to evaluate the management performance.
Master budget is a series of budgets and generally starts with the sales budget that guides the process which involves the production levels and mainly the cash that is needed for production. This combines all the smaller budgets to get a comprehensive view of the company’s finances and that is the overall budget. This is very important tool on the basis of which employees normally compare the performance with the overall budgeted performance. It helps in growth of the business and makes a good amount of contribution to aim high and achieve. Determining the cash budget to be in effective assumptions to get the outputs quickly done is the key thing. Sales budget is the foundational budget by which all other budgets can be calculated for any business unit (Pryor, L. J 1971).
Personal Understanding:
Individuals at each and every company within the team judgements are valued by top management in the process budgeting.
Motivation is always high when each individual participates in making the goals than getting it done by the management.
Budget targets are basically preferred based on reward-based target meetings.
Comprehensive planning for a company that consists of all the supporting budget and makes an effective use of things and services.
Conclusion:
Managers typically spend a lot of time in creating a budget and makes a lot of effort to get approved on maintaining the resources for a company. Very important are figured out mainly planning and control to make sure in achieving the goals which are already set. The amount of profitability, net income, forcing people to think of budget, co-ordinate the resources, manage the cash are the key things. Maintaining the profitability along with managing the cash is the essential thing for all the managers in any company to provide the capital.
References:
Steimer, T. E. (1990). Activity-based accounting for total quality. Strategic Finance, 72(4), 39.
Cooper, R., & Kaplan, R. S. (1991). Profit priorities from activity-based costing. Harvard business review, 69(3), 130-135.
Malmi, T. (1997). Towards explaining activity-based costing failure: accounting and control in a decentralized organization. Management accounting research, 8(4), 459-480.
Cox, P. (2014). Master budget project: Analysis of cash budget report. Strategic Finance, 95(9), 52.
Mounika HR replies
Ankolika Bhatia - Tuesday, August 11, 2020, 6:50 PM
Number of replies: 0
Currently insurance coverage is provided to 63.4% of population in US , with more than 50% of the population using public programs such as Medicare (Ashley, 2003). It is important to understand the rising cost which are due to increase in competition in market, profit levels and health plans and so health costs are out of control in US. The other driving factors are high technology which include new surgeries, fertility treatments etc. which are very costly and ultimately lead to price rise (Trude 2004).
If the employees’ value, the health benefits provided by the employer they would usually become victim of higher premiums and lower wages. So, as to curb the rise in premiums may cause employers to reduce the hiring of people and shift to part time workers who are not eligible for company benefits. Some economists suggest using state level per capital medical by conducting malpractice and predict the insurance premiums. These malpractices might be observable and too predictive in future run. Rising these prices ultimately puts both the uninsured and unemployed at risk of higher premiums (Trude 2004)
References:
Ashley. C (2003), “Disease Management: A Leap of Faith to Lower-Cost, Higher-Quality Health Care’. Retrieved on August 11, 2020 from https://www.hschange.com/
Trude.S (2004), ‘Rhetoric vs. Reality: Employer Views on Consumer-Driven Health Care’. Retrieved on August 11, 2020 from https://www.ebri.org/publications/ib/index.cfm?fa=ibDisp&content_id=179
Jaya Madhava Kosireddy - Wednesday, August 5, 2020, 1:38 PM
Number of replies: 4
When contrasted with other various nations, human services costs are high in the United States. In addition, social insurance costs have risen extremely quicker when contrasted with the yearly pay. In the year 2017, the medicinal services costs in the United States were $3.6 trillion, and because of this, the social insurance turned into the biggest business in the nation. It is equivalent to 17.8 per cent of GDP (Gross Domestic Product). In 1960, the human services spent 4% of salary when contrasted with 6% of pay in 2013. likewise, the way of life changes and government strategy is the significant explanation behind the monstrous increment in social insurance costs. Incessant sicknesses like coronary illness and diabetes have expanded just as these ailments are responsible for eighty-five per cent of the costs for social insurance (Chatfield, 1983).
In light of the tremendous number of Medicare patients, the social insurance costs are rising step by step in the nation. Aside from this, high - intrigue related Mastercard obligation has been ascended to 34 per cent as a result of the expanded medicinal services costs. What is more, the non-market and market factors are the significant explanations behind the higher social insurance costs because these components which decide the valuing. In the U.S., the private and open sources offered medical coverage based on inclusion.
Other than these, the human services costs have been expanded as a result of the maturing and developing populace, patients evading care, absence of straightforwardness and wastefulness, expanding medical coverage based premiums, expanded mobile costs, and ascend in specific constant ailments just as the costs of the human services are expanding step by step due to the expanded costs for crisis and outpatient room care or cash-based costs (Corporate Health-Care, Cost Management, and Private Sector Initiatives, 1990).
References
Chatfield, M., 1983. Health Care Cost Containment—Proceedings of a MAPI Conference. Health Care Management Review, 8(2), p.83.
Health Care Management Review, 1990. Corporate Health-Care, Cost Management, and Private Sector Initiatives. 15(1), p.94.
Bindu Sree Sreeramoju - Wednesday, August 5, 2020, 10:24 AM
Number of replies: 0
Disaster Management Plan
Companies are faced by various challenges and disasters that affect the company operations by either limiting them or completely stopping them. This leads to huge losses by the company because they still have to pay for labor that is not performing their tasks and some have to incur losses once their perishable raw materials become rotten. Companies have to be prepared to deal with the disasters that they might face and also come up with strategies that will be used to help the company recover from the effects of the disasters.
Natural disasters are some of the most destructive disasters and they occur more frequently and unexpectedly than any other disaster. Some of the natural disasters that might affect companies include floods, heavy snowfall, hurricanes, cyclones, typhoons, earthquakes and strong winds. This might damage the company's structures and equipment among other properties that the company has (William, 2012).
Companies should make sure that they have insured the company's structures and equipment in case of extreme damage and they need new equipment or expensive repairs. The company should also make sure that it has strengthened its structures by using things such as steel bars or concrete and this will help in protecting the company's structure from damage. (Sanders, 2011).
References
Sanders, R. (2011). Operations Management. New York: Wiley Publishers.
William, J. (2012). Disaster Recovery Planning: Preparing for the Unthinkable. New York: Prentice Hall Publishers.
Aakanksha Vaidya - Wednesday, August 12, 2020, 10:10 PM
Number of replies: 1
What should be included in disaster planning for a large employer in Annapolis, Maryland, that is concerned about natural disasters such as floods and snowstorms that might shut down the company and parts of the city?
Mary land is a place where snowstorms, floods are quite common. Annapolis is the capital of Mary land and there also the climate changes are quite frequent. It is very much necessary for the companies out there to understand the weather and accordingly build the companies and provide all the precaution measure for the employees as well as the location safety is also very important. For the effective working of the company it’s very much necessary for the company to have strong risk management as well as the planning requires after any disaster. The work of the Management team is to understand plus analyze the in and out risk related matter related to the disaster.
The major steps are to keep giving training to all the employees so that at the time of any sudden disaster they will be prepared. Another major item needs to be taken care is to have a strong back up software available for all the organization machine so that their will be no loss of data. Keeping fire extinguisher at each part is the very important.
Considering the situation of Annapolis, it requires special planning to cope up from the disaster and special training also. Since the area is prone from flood and snowstorm it necessary to take more precaution.
Reference :-
- Crisis Management and Emergency Planning: Preparing for Today's Challenges
Book by Michael J. Fagel - Product Harm Crisis Management: How to Lead a Company by Paola CANE
Mounika ME replies
Abhinov Goud Begudam - Friday, August 7, 2020, 5:54 PM
Number of replies: 0
Introduction
The concept of an economic system can best be described as the means by which governments or societies enhance the organization and distribution of available resources, goods, and services. The traditional economy is still in practice in most parts globally, with a rural tendency that is established in the second or third world arrears that have a close attachment to the land, especially through farming. Thus, surpluses are established to be rare with regards to the traditional economic system due to the fact that every traditional economy member has a more pronounced and specific role that enhances social satisfaction although the economy lacks advanced medicine and access to technology. The mixed system of economy entails combining various economic systems, which incorporates mostly both the market and command economic systems. Other systems of the economy consist of the market economy, which entails a free-market and the command economic system that entails heavy government intervention (Orr, 2011).
According Steven Kates (2017) on the article of Free-Market Economics ISBN: 978 1 78643 140 0, "The market economic system entails a free-market an economy which is entirely opposite in comparison to the command economies due to the fact that the households in an economy alongside firms act in self-interest with regards to the determination of allocating resources, goods production, and the buyers of the goods." Therefore, Steven Kates (2017) establishes the market economy as an economic system whereby the decisions regarding production, investment, and distribution are established through the price signals attributed to the forces of both demand and supply. This type of economic system is characterized by the aspect of private ownership, limited government intervention, competition, and self-interest, freedom of choice, and optimized selling and buying platforms. The paper concludes the fact that competition drives the economy due to efficiency and innovation optimization (Steven Kates, 2017).
According to Donald C. Wellington (2000) on International Journal of Social Economics
ISSN: 0306-8293 on a command economy, “The centralized power is greatly involved in the control of a command economy, which is established as being the core with regards to the communist philosophy. Here the government is greatly involved in the planning and resource distribution". Therefore, a command economy entails the government making all economic decisions. For instance, the D.P.R.K. or china economies are examples of command economic systems (Donald C. Wellington, 2000).
Conclusion
Various economic systems exist in an economic setting, which includes traditional, command, market, and mixed economic systems. Therefore, an economic system is identified as a social system entailing production, allocation of resources, and both goods and services distribution with regards to a particular society subject to an established geographical location (Orr, 2011).
References
Donald C. Wellington. (2000, April 1). The command economy cometh. Retrieved from https://www.emerald.com/insight/content/doi/10.1108/03068290010317145/full/html
Steven Kates. (2017, June 30). Free market economics, third edition. Retrieved from https://www.e-elgar.com/shop/gbp/free-market-economics-third-edition-9781786431400.html
Orr, T. B. (2011). Understanding economic systems. The Rosen Publishing Group.
Ashish Kumar Devakate - Sunday, August 9, 2020, 8:24 PM
Number of replies: 1
The four types of economies are:
- The traditional economic system
- Command Economic System
- Market Economic System
- Mixed Economic System
Right here we’ll talk in detail on Command Economic System and Market Economic System
Command Economic System: In an order economic device, a big part of the financial device is controlled via a concentrated strength. as an instance, inside the use, most choices had been made through the principal authorities. This type of economy changed into the center of the socialist way of thinking. (Eckstein, A., ed., 2013.)
Since the government is such a principal feature of the economic system, it's far regularly concerned in the entirety from planning to redistributing resources. A command economic system can create a healthful supply of its resources, what's more, it compensates its human beings with less expensive fees. This functionality additionally manner that the authorities commonly owns all the vital ventures like utilities, aeronautics, and railroad.
Market Economic System: In an unfastened-marketplace economy, companies and families act in self-hobby to decide how assets get allotted, what goods get delivered, and who purchases the products. this is opposite to how an ordered economy works, in which the relevant authorities receive to keep the income. (Rota, A. 2019.)
There is no government intervention in a natural market financial system but, no actually free-market economic system exists within the world. for instance, whilst us is an industrialist country, our authorities still regulate (or tries to control) fair alternate, government programs, sincere enterprise, monopolies, and so forth.
Journal Articles - Profiting from government stakes in a command economy: Evidence from Chinese asset sales
Summary: This looks at the market response to an unexpected assertion of the sale of government-owned shares in China. In assessment to in advance work, there may be a terrible effect of presidency possession on returns at the assertion date and uneven high-quality the impact from the coverage’s retraction (Eckstein, A., ed., 2013.). The idea is that this end results from the nonappearance of a Chinese financial changes so that the advantages of political ties exceed the performance charges of presidency shareholdings. businesses controlled via former government officers have superb peculiar returns, recommending that non-public ties can substitute for authorities' possession as a supply of associations (Eckstein, A., ed., 2013.).
Introduction: The effects on the market returns of in part privatized Chinese language companies of bulletins of the proposed income of remaining government shares are studied. there may be a widespread exact and hypothetical writing on the political-economic system of privatization (Eckstein, A., ed., 2013.). The exact work in this area has emphasized the efficiency profits that originate from privatization; almost consistently, scientists have observed
those exclusive corporations have better-measured earnings and efficiency than government-run companies, each within the go-segment and as a result of performance modifications following public share services of presidency businesses. ( Ericson, R.E. 2013.)
Conclusion: We find that the inventory market reacts adversely to unforeseen further privatization and to the retraction of this proposed coverage (Ericson, R.E. 2013.). We additionally discover that move-sectionally, better government possession has a poor effect on firm returns at some stage in the privatization statement, and a superb impact during the retraction announcement. Our regression outcomes recommend that government possession is associated with blessings to government-linked companies in an economic system like China’s where the government continues to work out big manage over the economy. Our consequences indicate that, at the least from the perspective of firm profitability, reduced authorities’ ownership is not continually favorable. (Ericson, R.E. 2013.) - Research on the Market Economy Model
Summary: So that you can promote China’s marketplace financial system reform, it’s vital to examine existing market models (Rota, A. 2019.). This paper explored on three current usual marketplace economy models, and especially utilized the regulating evaluation method and comparative evaluation approach. via compare 3 extraordinary financial fashions, this paper found two differences that may cause the diversity of version; but, they nevertheless have 3 likenesses in an exclusive model, what's more, the paper infers that there are some basic guidelines that must be obeyed in a market economy.( Rota, A. 2019.)
Introduction: For the duration of history, every society has faced the essential financial trouble of identifying what to provide and for whom, in confined assets. while marketplace economies based on personal business enterprise, outperform order economies coordinated by means of a brought together authority, for its adaptability and practical component, that can automobile allotted the constrained assets correctly. consistent with specific standards, there are unique marketplace models (Rota, A. 2019.). China is still at the primary level of the marketplace economic system, the marked improvement in China is immature. therefore, the study of various styles of marketplace economy fashions can assist us to improve our marketplace economy construction. (Rota, A. 2019.)
Conclusion: China is wearing in the marketplace financial system reform now and had acquired a successful fulfillment. but, because of the market financial system is from a planned financial system trade over, a few problems appear in China (Ahearn, A. 2017.). in the present day criminal incomplete condition, illegal phenomena are common, such as managerial syndication and neighborhood protectionism, which against the primary ideas of the marketplace economy. enterprise fraud and insufficient funding in public goods additionally restrict the regular development of the marketplace. market operation is not widespread, and the marketplace economy still needs in addition to flawlessness in China. The relative observation of the market economy model can help us apprehend the essence of the market machine. (Ahearn, A. 2017.)
Reference:
Eckstein, A., ed., 2013. evaluation of economic systems: Theoretical and Methodological
tactics. Berkeley, CA: University of California Press.
Ericson, R.E. 2013. A difficulty with the ‘command’ allocation mechanism. magazine of financial
concept 31(1), October 1—16
Rota, A. 2019. cattle and Pastoralists. Rome: International Fund for Agricultural
Improvement (IFAD).
Ahearn, A. 2017. ‘Herders and hazards: covariate dazed hazard and the price of threat control
techniques in a Mongolian subdistrict’. natural hazards ninety-two (complement 1). Dilip Goduguchintha - Saturday, August 8, 2020, 9:47 PM
Number of replies: 0
Command Economic System:
Unlike market economies, Command Economic System do not promote individual freedoms, such as freedom of thought and expression, or freedom to obtain income that is not subject to state approvals. Command economies are rare and not peaceful or planned economies. he economies are based on a command economy, and the governments provide the means for making and enforcing their dictates( Jenkins, D. P. 2008). When you begin to understand the command economy you find that it is unique, in the sense that it is not a capitalist economy, but rather a command economy. There are no entrepreneurs, no entrepreneurs producing their own products, no individual businessmen producing their own products. The production is by the government. The production is in the form of a "military order", to make sure that a nation is able to defend its territory and that its citizens are able to move freely between the nation and its possessions. This is the ultimate goal of the economy, and the way in which that goal is pursued is through militarism. The aim of the economy is to keep the military order, and to keep its citizens free to move and to produce. Now, since capitalism is based on a free market in individual goods and labor, and since all goods and labor are created through the division of labor, and since each member of the labor force is paid for the division of labor, and since the division of labor has been created through command economies and a free market in markets, this means that the free market economy has been replaced with a command economy, and that society is now led by a government in which there is no free market.(Gregory, P. R. 1990).
References:
Gregory, P. R. (1990). The Stalinist command economy. The ANNALS of the American Academy of Political and Social Science, 507(1), 18-25.
Walker, G. H., Stanton, N. A., Salmon, P. M., & Jenkins, D. P. (2008). A review of sociotechnical systems theory: a classic concept for new command and control paradigms. Theoretical issues in ergonomics science, 9(6), 479-499.