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Rational decisions: improved cost basis available both at head office and plant level for better decision making.

基于活动的成本核算的优势——ACTIVITY BASED COSTING ADVANTAGES

More accurate costing of products/services, customers, SKUs, distribution channels

Better understanding overhead.

Easier understandability

Utilizes unit cost rather than just total cost

Integrates well with Six Sigma and other continuous improvement programs

Makes visible waste and non-value added

Supports performance management and scorecards

Enables costing of processes, supply chains, and value streams

Activity Based Costing mirrors way work is done

Facilitates benchmarking

基于活动的成本核算的缺点——ACTIVITY BASED COSTING DISADVANTAGES

More time consuming to collect data

Cost of buying, implementing and maintaining activity based system

Makes waste visible which some executives and managers don't want their boss to see.

Cost factors- cost of change will be high as everything will have to be worked out from scratch.

Difficulty on establishing relationship: it would be difficult to correlate the marginal increase in cost with a particular cost driver.

Difficulty in standardization: over a period of time, the ABC will tend to standardize the cost of activities related to a particular product or process. But in practice there will be differences in set up time, production run, and meeting a delivery order.

总结——CONCLUSION

For a business to grow larger in terms of quality and market target, it has to follow the strategic management accounting techniques. The accounting techniques helps the organization to cut down its waste costs and thus increasing the profit margin of the organization.

While small business owner and managers may consider management accounting to be an unnecessary drain on their time in the starting life of the business, but it is being proved that using management accounting to support strategic planning in any organization be it large or small, it has a positive and significant effect on performance. Even from an early stage or in a sole trade ship, a basic information system might be developed. Overtime, as the company grows, then so to should accounting information system. Then it can be used to support future plan and strategies, to assist in decision making and to act as a control mechanism by providing a benchmark against which performance can be assessed.

Every kind of business has a vision and a mission. The Strategic management accounting takes into account both of these. It helps in accomplishing the organizational goals in an effective manner.

Updating the strategic management processes time to time also helps in putting in the development of the more complex management structural that are needed as firms grow.