ABC at CM Tech

In completing your reading for the week you learned about the benefits and challenges faced in accounting data.  Chapter 21 and 22 introduced you to managerial versus financial accounting and activity based costing (ABC).  ABC, though challenging to implement, can bring a wealth of clarity to the actual costs and performance of the organization.  Unfortunately it’s not easy to implement, support, and once in existence it’s often met with huge amounts of resistance.  Emma knows that some of the accounting information used at CM Tech has the potential to be improved upon.  She wants to pursue improvements in this area in order to support the forward progress of the performance management strategy.  However, she is not an accountant and needs more information before she can make an informed decision and sell the concept to the rest of the team.  She asks you do do some research for her.  

Your research paper for Emma should include the following key elements: 

  1. What is the difference between managerial and financial accounting?  Which one involves ABC costing and the inward looking performance measures that Emma is looking for? 
  2. What is activity based cost (ABC) and how does it differ from traditional costing methods?
  3. If Emma decides to implement ABC what key benefits will it provide and what key challenges will she face?  Be sure to fully support your assertions in all three sections with reasoning, examples, and research.

Your report should outline the key concepts in each area listed above and provide examples as appropriate.  Be sure your report is a minimum of 4 pages, includes an introduction and conclusion paragraph, title page, and references page.  The title and references pages do not count toward the total page count.  The report should be formatted in APA style and be supported by a minimum of three scholarly references.

Since CM Tech is a fictitious company, you may use great liberty in this assignment in creating or imagining the details needed in order to write your report.