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This paper explains that developing a managerial accounting system for Riordan Manufacturing will enhance the level of efficiency in the area of cost control. Currently, management at Riordan is focused on production, but the company's intent is to shift greater importance to implementing an activity-based costing accounting system that will correctly allocate costs and assign the level of profits proportionally. The paper contends that, since Riordan Manufacturing is already implementing an Enterprise Resource Planning solution, it is in an advantageous position to meet the information needs of this type of cost accounting.
From the Paper:"According to the traditional cost allocation method, product costs are calculated according to the number of units produced. As a result, this method does not take into account the level of resources expended in producing these units. This cost distortion is particularly pronounced in the case of Riordan Manufacturing because the same level of production for two different products necessitates different levels of resource consumption."
Sample of Sources Used:
- Atkinson, Anthony A., et al. (2006) Management Accounting. McGraw Hill/Irwin.
- Brigham, Eugene F., and Michael C. Ehrhardt. (2007). Financial Management: Theory & Practice. South western college pub.
- Hill, Charles., and Gareth Jones. (2007). Strategic Management Theory: An Integrated Approach. McGraw Hill/Irwin.
Cite this Case Study:
Riordan Manufacturing (2009, August 16) Retrieved October 20, 2021, from https://www.academon.com/case-study/riordan-manufacturing-115871/
"Riordan Manufacturing" 16 August 2009. Web. 20 October. 2021. <https://www.academon.com/case-study/riordan-manufacturing-115871/>