If the Farm Council did not use activity based costing, here are some dysfunctional decisions that could be made by using traditional cost allocation. Farmers, like companies, have bad years, but good farmers don't resort to bad farming practices – it disrespects their scarcest resource, for farmers, land is their scarce resource. With the traditional cost allocation farmers could plant too many soybeans based on the previous year demand for that particular product and not make a sound decision that could cost him during the following year. Good farmers have to practice good husbandry by rotating crops, letting land lie fallow, and irrigating. In the long run, these investments help their farms stay productive for generations. However other farmers buy up land, plant every square inch with this year's biggest cash crop, skip irrigation and fertilizer, and abandon crop rotation. At first, they have bigger yields than their neighbor, but in later years they burn out the land. This is a situation that I don’t think John or Mary will find themselves in; however another farmer with less experience could fall victim to this and by using the traditional method I could see how it would be easier to do versus activity based costing. Also another bad decision that could be made by not using activity based costing is the cost allocated to a process
-Starbucks cares about the arts and supports art by donating x amounts of dollars to be able to send kids to art and music school.
-We do this by allowing local musicians to play in our starbucks store once a week (Wednesday) to promote their music and have a platform to express themselves.
Artist can hang their painting in our stores for a week rotating them and if guest are inte ...