Below Is The Question And Student Response Reply To The Stud

Below Is The Question And Student Rsponse Reply To The Students Respo

Below is the question and student rsponse. Reply to the students response in 150 words Question In its advertising, Ford Motor Company says "Quality is Job One." Ford is indicating that good quality is the most important consideration for its customers. This would include customer satisfaction on delivery dates and specific areas of car performance, including properly closing doors, and defect rates. Explain how Activity Based Costing can help supply this information to Ford's management. students response Activity based costing is used by managers within companies to assign costs to overhead activities that require time and resources so they can be quantified and added to the costs of products.

Ford management can use Activity-Based Costing to supply this information by using the change in activity levels as measures of things like customer satisfaction, product production cost, average time required to properly produce a finished good in a specific department(ex: time required for the upholstery employee to properly sew a leather seat) and other important factors in producing good results. With Activity-Based Costing, a manager can assess the cost required in the indirect manufacturing processes of a product and then decide if they need to reduce this overhead activity to save on costs, or, in the cast of Ford, they can use this information to accurately estimate the time and cost required to produce the acceptable standard for a product and plan around these time-cost variables.

Paper For Above instruction

Activity-Based Costing (ABC) is a strategic tool that provides detailed insights into the cost structure of manufacturing processes, thereby enabling companies like Ford to enhance quality and customer satisfaction. While traditional costing methods allocate overhead uniformly, ABC assigns costs based on actual activities that drive expenses, such as assembly, inspection, or quality checks. Ford can utilize ABC to identify the real costs associated with producing quality vehicles, including the resources required for ensuring proper door closures and reducing defect rates.

Implementing ABC allows Ford management to track specific activities linked to customer satisfaction metrics, such as time spent on quality inspections or rework. By analyzing these activities' costs and frequencies, Ford can pinpoint inefficiencies or quality issues that inflate costs or compromise quality. For example, if excessive time is spent on re-inspections for poorly closing doors, management can focus on process improvements or employee training to reduce these costs and improve quality standards. Moreover, ABC provides data to better estimate the cost of achieving specific quality levels, assisting in planning and resource allocation to meet customer expectations.

Furthermore, ABC's detailed activity data supports decision-making regarding process improvements, supplier management, and investment in quality control measures. By aligning cost information with quality outcomes, Ford can proactively enhance product reliability and customer satisfaction while controlling costs. In conclusion, Activity-Based Costing equips Ford's management with precise, actionable information about the activities that matter most to quality and customer satisfaction, ultimately enabling a strategic focus on continuous improvement and excellence in vehicle manufacturing.

References

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