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INTRODUCTION
The term management accounting refers to producing information to internal sources. These internal sources can be top-level managers or floor supervisors. The information that is produced is used for planning and controlling the company’s actions while also producing information that aids in the decision making process. A management accounting systems is used as an aide in this process. Management accounting systems can produce information for the costs of goods, products and services, and other departments in the company. A management cost accounting system produces information regularly for budgeting, performance, and the production of cost reports (Talha, Raja, Seetharaman, 2010, P. 83).
In the 1980’s, more attention was given to management accounting, and its inability to keep up with technology. The advances in technology in manufacturing and information technology led to the need for a more advanced management accounting system that replaces the traditional cost management system already in-place. The traditional cost management systems were in place to offer neutral and objective financial information that was easy to calculate (Talha, Raja, Seetharaman, 2010, P. 83-91).
To keep up with these changes, activity-based costing (ABC) was created. ABC is considered an alternative approach to the traditional cost management models. This accounting approach is focused on the causality and providing the decision makers the ability to manage costs at the root, as opposed to focusing on the product cost alone (Talha, Raja, Seetharaman, 2010, P. 91).
ACTIVITY BASED COSTING: THE BASICS
Activity based costing (ABC) was first proposed to the United States during the 1970’s-1980’s. ABC was brought to the country to ove...

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...er Profitability: Insights from the Paper Industry in Florida. Research in Business and Economics Journal , 1-9. Retrieved from http://origin-search.proquest.com/docview/1114066869?accountid=91041

Talha, M., Raja, J. B., & Seetharaman, A. (2010). A New Look at Management Accounting. Journal of Applied Business Research, 26(4), 83-96. Retrieved from http://origin-search.proquest.com/docview/733023696?accountid=91041

Velmurugan, M. S., & Bte Wan Nahar, Wan,Nur Azah. (2010, Sep). Factors Determining the Success or Failure of ABC Implementation. Cost Management, 24, 35-46. Retrieved from http://origin-search.proquest.com/docview/757373364?accountid=91041
Velmurugan, M. S. (2010). The Success and Failure of Activity-Based Costing Systems. Journal of Performance Management, 23(2), 3-33. Retrieved from http://origin-search.proquest.com/docview/856125540?accountid=91041

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