Activity Based Costing for Amp Limited Financials

Activity Based Costing1
ACTIVITY BASED COSTING FOR AMP LIMITED FINANCIALS
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Activity Based Costing2
ACTIVITY BASED COSTING FOR AMP LIMITED FINANCIALS
Executive summary
ABC is a costing technique that assigns cost to the products. The report is all about the
application of this technique in operations of amp limited Financials Company. The tool is
described and its features are outlined. The alignment of the technique to the strategies and goals
of the company are evaluated. The tool is in alignment with the company’s strategies which
makes it ideal for the company. An alternative technique is also discussed. The alternative
technique is the cost of quality tool. This tool enables the company to evaluate the quality of
costs incurred and it can be used in the place of ABC costing

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Table of Contents
Executive summary.....................................................................................................................................3
Introduction.................................................................................................................................................3
Activity based costing and it’s features.......................................................................................................3
Features of activity based costing...............................................................................................................4
How activity based costing aligns with the strategies and goals of amp limited financials.........................4
Mission of amp limited financials............................................................................................................4
Objectives................................................................................................................................................5
Corporate strategies of AMP limited financials.......................................................................................5
How activity based costing aligns with the strategies and goals of amp limited financials.........................7
Recommendation on implementation of activity based costing in amp limited financial company............9
Alternative management accounting tool.................................................................................................10
Conclusion.................................................................................................................................................10
References.................................................................................................................................................11
Tables and charts.....................................................................................................................................................12

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Introduction
Amp Limited Financials is a financial company which provides superannuation and
investment products, insurance, financial advice and banking products. From the company’s
objectives, it is evident that the company is involved in a lot of activities. A need to employ a
costing tool which is effective especially in accounting for all this activities is important in a bid
to ensure success of company (Kaplan and Porter 2011). Activity based costing best fits this
company. The report therefore is to show the compatibility of the tool with company’s need. The
tool plays a great role in establishing the real cost incurred which on other hand is vital in
evaluation of profits. The tool is of great help in decision making process.
Activity based costing and it’s features
Activity based costing is an accounting method in which firm’s activities are identified
and then indirect costs are assigned to the products of the firm. Basically activity based costing
looks at the relationship between cost, activities and products. From this relationship, the method
assigns indirect costs to the product (steven bragg, 2017).
Features of activity based costing
According to Kolar, the following are some of the key features of ABC costing technique
(Nguyen and Aiello 2013).
In ABC method, total cost is divided into two types, that is, fixed cost and variable cost.
The division of total cost is important in providing quality information to design a cost