ABC Analysis: A Case Study of Domain Holdings Australia

ABC Analysis

Executive Summary
The Activity-Based Costing method popularly known as ABC method of costing is utilized in
many organizations since is development and implementation since late 80’s when it was first
identified by the manufacturing sector. The manufacturing sector was the first industry wherein
the organization was able to identify the true potential and value of the ABC costing method and
make the proper analysis of the processes included in the production units of many
organizations. It was later identified that the ABC costing methods would be able to derive
proper and effective results as per the needs and requirements of the organizations in order to
identify the total costs in all the functional departments of the organization. This report would
include the identification of the essential features of ABC analysis that provides the competitive
advantage for organizations in improving the process of costing and analysis of all the essential
fixed and variable costs that do not contribute potentially for the development of product or
services but adds value unnecessarily to the final products or services. This leads to the reduction
in the profit margins and sales revenue of the products or services in the highly competitive
market. We would analyze the implementation of the ABC costing method in Domain holdings
Australia which is popularly known as Domain Group currently operating in the online retail
business of real-estate and property dealing wherein they provide marketing solutions to the
clients and other companies in the Australian market. We would analyze the impact of the ABC
costing method implementation in Domain Holdings Australia.
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Contents
Executive Summary.....................................................................................................................................2
Introduction.................................................................................................................................................4
Features of ABC costing method.................................................................................................................4
Alignment of corporate goals and strategies with ABC model....................................................................6
• Domain Holding Group mission and objectives.....................................................................................6
• Domain Holding Group’s corporate strategies.......................................................................................6
• The assistance of ABC model in achieving Domain Holding Group’s strategies.....................................7
2 Recommendation for implementation of ABC model...............................................................................7
Alternative management costing tool for Domain Holding Group..............................................................8
Conclusion...................................................................................................................................................8
References...................................................................................................................................................8
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