Activity Based Costing and the Theory of Constraints Are, Respectively, Overhead Absorption Costing and Marginal Costing in a Different Guise
BRUNEL BUSINESS SCHOOL
COVERSHEET FOR ONLINE COURSEWORK SUBMISSIONS
Module Code MG2134
Module Title Management Accounting
Module leader Tony Tollington
Student ID number 0617484
Degree Programme (e.g. Business and Management (General)) Business Management and Accounting
I understand that the School does not tolerate plagiarism. Plagiarism is the knowing or reckless presentation of another person’s thoughts, writings, inventions, as one’s own. It includes the incorporation of another person’s work from published or unpublished sources, without indicating that the material is derived from those sources. It includes the use of material obtained from the internet. (Senate Regulations 6.46)
By completing the above details, I confirm that I adhere to the School’s Policy on plagiarism.
Activity Based Costing and the Theory of Constraints are, respectively, Overhead Absorption Costing and Marginal Costing in a different guise
Introduction
In this assignment I will be investigating the assertion that Activity Based Costing and the Theory of Constraints are, respectively, Overhead Absorption Costing and Marginal Costing in a different guise. To analyse this statement I will compare ABC with Overhead Absorption Costing and Theory of Constraints with Marginal Costing. All of these methods are well know and generally used in organisations, however Activity Based Costing and Theory of Constraints are relatively new methods, as both were developed in around 1970s whereas the other two are more than seventy years old. This is why it will be interesting to see how those methods compare, whether older methods will be still relevant and can they really be replaced by more contemporary techniques if those methods are alternative to each other. The results should show similarities and differences between each method used in cost and management
COVERSHEET FOR ONLINE COURSEWORK SUBMISSIONS
Module Code MG2134
Module Title Management Accounting
Module leader Tony Tollington
Student ID number 0617484
Degree Programme (e.g. Business and Management (General)) Business Management and Accounting
I understand that the School does not tolerate plagiarism. Plagiarism is the knowing or reckless presentation of another person’s thoughts, writings, inventions, as one’s own. It includes the incorporation of another person’s work from published or unpublished sources, without indicating that the material is derived from those sources. It includes the use of material obtained from the internet. (Senate Regulations 6.46)
By completing the above details, I confirm that I adhere to the School’s Policy on plagiarism.
Activity Based Costing and the Theory of Constraints are, respectively, Overhead Absorption Costing and Marginal Costing in a different guise
Introduction
In this assignment I will be investigating the assertion that Activity Based Costing and the Theory of Constraints are, respectively, Overhead Absorption Costing and Marginal Costing in a different guise. To analyse this statement I will compare ABC with Overhead Absorption Costing and Theory of Constraints with Marginal Costing. All of these methods are well know and generally used in organisations, however Activity Based Costing and Theory of Constraints are relatively new methods, as both were developed in around 1970s whereas the other two are more than seventy years old. This is why it will be interesting to see how those methods compare, whether older methods will be still relevant and can they really be replaced by more contemporary techniques if those methods are alternative to each other. The results should show similarities and differences between each method used in cost and management
References: www.globusz.com/ebooks - Chapter 2- Marginal costing and Absorption Costing Marginal Costing by Adolph Matz ; research pg.355 (Jun 1950) Introduction: Marginal Costing as a Management Accounting Tool, by Stephen Offenbacker; Management Accounting Quarterly. (Winter 2004) Absorption Costing -Money, Angela; Accountancy (Nov 1995)