Adacel Technologies Ltd ABC System Recommendation Report

Managerial Accounting 1
ADACEL TECHNOLOGIES LTD ABC SYSTEM RECOMMENDATION REPORT
Student By (Name)
Professor’s (Name)
College
Course
(Date)

Managerial Accounting 2
ADACEL TECHNOLOGIES LTD ABC SYSTEM RECOMMENDATION REPORT
Introduction
The following is a detailed recommendation report for Adacel Technologies Ltd on the
need to incorporate ABC system as a management accounting tool to use by its management
team. Given the complexity of this software and service company, the report is in devoured to
give a vivid description of what ABC system entails its impact on Adacel's seamless growth
through alignment with its goals such as projection to outdo their competitors through continual
development of hi-tech products and services. This ABC system recommendation report is
geared at explaining the positive impact of ABC system on Adacel's corporate strategies, how
the system will align with company's mission and objectives and how the order shall be a driving
force to realizing Adacel's company strategies.
Client Company
Adacel is a software and services company, which produces high tech simulation and
training solutions, speech recognition applications and operational traffic management systems.
Globally its products and services have gained an excellent reputation through inherent devotion
to technological leadership and customer support. It develops simulation and training systems for
military and commercial use based on higher standards of deployment to the training
environment. It is presumably a leading supplier of traffic control simulators (ATC) for both
primary and advanced ATC training alongside research and modelling of air traffic procedures. It
is made up of aviation phraseology proficiency training, automated ATC environments for flight
simulator training and security operation training simulation systems (Kaplan and Anderson
2003). The company trains airport drivers and produces tactical voice applications used by

Managerial Accounting 3
police. Its systems are rapidly deployable systems, and they stretch from high definition
simulators to smaller.
The company has pioneered the integration of speech recognition into simulation
products, has patents on application to optimize speech processing, and has been involved in
serious games and operational systems with many systems being available in many of Adacel's
systems and present for integration into third-party products using Adacel's Lexix SDK and
Lexix Dialogue Editor (Granof, Platt and Vaysman 2000). The company is also a world leader in
real-time and satellite-based air traffic management automation solutions among other services
like automated conflict detection, four D profile protection available through its Aurora
capabilities. Adacel is renowned and recognized as the leader in its entire field evident by many
top industries awards it has won for innovation and program excellence over the many years of
its existence.
(a) ABC model and its features:
Activity-based costing (ABC) model can be described as a methodology that allocates
overhead more precisely to the item that utilizes it. The system can be used to recognize the
relationship between products, costs and various activities; and via this relationship, the system
assigns ancillary values to products of choice in the more arbitrary manner than customary
methods. The ABC system operates optimally in multifaceted environments, where various
machines, products, and intertwined processes are hard to restructure (Karpov 2015).
Consequently, the system is less applicable in the situation where methods of production are
abridged. Activity-based costing can be best explained through the following chronological steps
that form its process flow.

Managerial Accounting 4
They include identifying costs. Here, we identify values that we would like to allocate.
This is the right step in the whole process since no time should be wasted with ambiguously
broad project scope; Loading of secondary cost pools. The step entails merely creating cost pools
for costs incurred while providing other sections of the company with services, contrary to
promoting company's products or services directly. Secondary price includes typically
administrative salaries, computer services and related costs; Loading of primary cost pools
(Srinivasan 2012). Here, we create cost pools for expenses that are more closely related to the
production of goods or services.
Consequently, other features are measuring of activity drivers. Using a data collection
system, information about activity drivers is collected which is later used to allocate the costs in
secondary cost pools and to primary cost pools, and then allocating primary cost pools to cost
objects and Allocating costs in secondary pools to secondary pools. Here we use activity drivers
to assign secondary cost pools costs to primary cost pools (Monroy, Nasiri and Peláez 2014).
Charging of costs to cost objects. Activity driver is used to allocating contents of every central
cost pool to cost objectives. Reports formulation. Results of an ABC system are converted into
reports to aid management intake and make decisions.
Improvement on acquiring action on the information. Here the apparent management
reaction to ABC model report is reducing the number of activity drivers utilized by each cost
objects. As a result, reducing the number of overhead costs employed. The prime goal of ABC
system is to determine how overhead is used (Tsai and Hsu 2010). Consequently, by having
ABC system, you bring on board its three primary objectives, namely; Rectification of inaccurate
cost information, Allocation of the overheads on the activity basis, to aid management take
quality and timely decisions.