ABC Costing Model for Common Wealth Bank: Analysis and Recommendations

COMMON WELATH BANK
ABC Costing Model
Costing model analysis
Name of the Author

Executive Summary
With the increasing complexity of the business and ramified economic condition, each
and every organization should use proper ABC costing model. The ABC Costing model assists
in bifurcating the cost in the different process. This process not only decreases the overall costing
of the business but also increases the efficiency of the business at large. In this report, Common
Wealth Bank has been taken into consideration to identify the features of ABC Costing model
and features for the business.

Table of Contents
Executive Summary.....................................................................................................................................1
Introduction.................................................................................................................................................2
ABC model in accordance with the goals, strategies, missions and objectives of Common Wealth Bank. .4
Recommendations-......................................................................................................................................5
Another Management Accounting Tool suitable for the use of Common Wealth Bank..............................6
Conclusion...................................................................................................................................................6
References-..................................................................................................................................................8

Introduction
Ideally, ABC costing is used to bifurcate the costing of business such as labour,
electricity, water and resources of the company in its different work process department of
organization. These all resources have their cost factors which could be used to classify the cost
in the different work process of organization. The ABC costing model assists in proper
allocation of the resources and suggests the way which could be used to reduce the overall
costing of the business. By using the ABC costing model, Common Wealth Bank could easily
determine the required amount of cost and time driven factors to classify the costs of the
different work process department (Common Wealth Bank 2017).
Activity based costing model-
The Activity based costing model is the most effective tool for the efficient classification
of the business cost in the different work process department of Common Wealth Bank. This
ABC model is used to analysis the deviation of the cost. Activity based costing model is a very
effective as well as efficient way used by the organization as it helps in analyzing the deviation
of cost in relation to the process work of the Common Wealth Bank and determine the actual
class cost in the different work driven process. The main benefit of the ABC costing in Common
Wealth Bank is related to its consistent tracking record, cost incurred and resource utilized in th
work process of organization. It is observed that by keeping the proper track record on the
identifying the cost incurred and implemented research and development department will
eventually increase the overall efficiency of the business.
However, ABC model is ideally used or deployed for the bifurcation of the cost in the different
work process department. With the increasing suitability and features of ABC model, is more
suitable for the manufacturing companies. It is observed that resources allocation of the business
could also be done by using ABC model costing. In Common Wealth Bank, ABC costing is
used to allocate the resources in different work department and identify the least cost of the
business process. It assists in determining the process cost drivers. However, Common Wealth
Bank does not require implementing the ABC costing model in its business. Nonetheless, by
using the ABC costing, Common Wealth Bank could ease its business process and could easily