Product Costing: Difference Between the Suggested and Alternative Solution (Essay Sample)

Running Head: Product Costing
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Do you think that this case study with it proposed solutions will be useful to agricultural enterprises seeking to employ management accounting techniques? Why? Be specific in identifying benefits and possible drawbacks to the proposed solutions.
The case study with proposed solutions will be useful to agricultural enterprises since the farm council would be able to prepare the farming ownership with consolidated accounts which are updatable and resource for the council in adjudicating matters of land allocations, property disputes, availability of resources for projects and emphasize importance of bringing changes in hazard and risk management capabilities.
The possible benefits in employing such techniques are to be able to
Increase efficiency in auditing.
Preparing planning and investment function resource availability.
Gathering data for census.
Creating avenues for investment.
Liberalizing environment for ethical appeal and account loan, disbursement of resources facilities.
Hazards of flood, fire and rodents need planning ahead which is quite possible from accounting exposure of activities and allocated area data.
Making health related issues and their solution effectively serviceable as also educating farmers about issues in health and diseases.
Possible drawback may be the political dragging of such issues where the farmer’s concern may become weak, ambitious wealthy farmers may be able to assuage the concern of the farmer’s in their favor; the resource mobilization may be used for community development than the use for developing farms and the changes in policy might become shackled. Again these drawbacks may not prove to be serious but cash accounting may prove to have serious drawbacks along with the issues over tax and burden calculations.
If the Farm Council Case did not use Activity Based Costing, identify several dysfunctional decisions that could be made using traditional cost allocation. Which solution do you prefer, the initial or alternative solution proposed in the case? Explain the difference between the suggested solution and alternative solution. The farm council case does not use activity based costing whereas several dysfunctional decisions could be made using traditional cost allocations:
Tax incentives may bloat the overall burden.
Allow cash accruals to become relevant only when costs are realized.
Maintain costs at the end without the forecasts from previous periods.
Traditional costs allocate equally between rent and loan when these are treated differently for by the methods while such allocations may render calculation different than expected for analysis.
The alternative solution in the case study is expectedly better but the original initial solution is easier for the implementation tactics and strategic alignment with future goals .This could be a perplexing issue which explains also the difference between suggested and alternative solution. The suggested solution develops partly by advice and partly by study whereas alternative solution is an available solution that can be applicable by choice. A suggested solution may not be applicable by choice.
Read this article: Throw Out Fixed and Variable Cost Thinking—Bring In Activity-Based Costing for Distribution Decisions retrieved August 17, 2009 from:  HYPERLINK "/Web%20Articles/White1.htm" \t "_blank" ...