Activity-Based Costing Model and Its Implementation for Ooh Media Limited

Running head: MANAGERIAL ACCOUNTING
Managerial Accounting
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1MANAGERIAL ACCOUNTING
Executive Summary:
In this report, sincere attempt is taken for providing a brief discussion of the variety
of aspects, which are inherent in the model of activity-based costing (ABC). The report is
prepared with the intent to shed light on the above-stated model with regards to one of the
entities listed in the “Australian Securities Exchange (ASX)”. To meet this intent, Ooh Media
Limited is considered in this paper. Ooh Media Limited is considered as a leading provider of
the rapidly growing out-of-home advertising sector in Australia and New Zealand.
It has been found that all the business organisations are adopting the ABC model for
enhancing their overall costing system. Moreover, with the help of this model, it is possible
to divide the total costs into fixed costs and variable costs. Furthermore, the management
of Ooh Media Limited could seek essential costing information by utilising the ABC model.
The reason is that such system would help the company in creating effective costing
techniques.

2MANAGERIAL ACCOUNTING
Table of Contents
Introduction:............................................................................................................................ 3
a) Activity-based costing (ABC) model and its characteristics:.................................................3
b) Alignment of ABC model with the present goals and strategies of Ooh Media Limited:.....5
i) Mission and objectives of Ooh Media Limited:.................................................................5
ii) Corporate strategies of Ooh Media Limited:....................................................................6
iii) Role of ABC model in accomplishing the strategies of Ooh Media Limited:....................6
c) Recommendations regarding the implementation of ABC model for Ooh Media Limited:..8
d) Alternative management accounting tool for Ooh Media Limited:.....................................9
Conclusion:............................................................................................................................. 10
References:............................................................................................................................ 11

3MANAGERIAL ACCOUNTING
Introduction:
In this report, sincere attempt is taken for providing a brief discussion of the variety
of aspects, which are inherent in the model of activity-based costing (ABC). The report is
prepared with the intent to shed light on the above-stated model with regards to one of the
entities listed in the “Australian Securities Exchange (ASX)”. To meet this intent, Ooh Media
Limited is considered in this paper. Ooh Media Limited is considered as a leading provider of
the rapidly growing out-of-home advertising sector in Australia and New Zealand. It has
unparalleled portfolio of digital and classic signs throughout roadside, airport, retail and
place-based media offering in cafes, office towers, bars, universities and fitness venues
(oOh!media AU 2018). Hence, this paper would provide a detailed account of the
characteristics of the ABC model and its implementation process by offering apt suggestions.
a) Activity-based costing (ABC) model and its characteristics:
One of the popular costing tools is the ABC model helping the enterprises to identify
activities carried out forming a part of the business operations. It assigns the products with
indirect costs and importance is laid on the relation among products, activities and costs so
that the goods produced could be assigned with indirect costs with much efficacy, which is
not possible under the conventional costing model (Brooks 2015). Exceptions could be
found where the managers of the enterprises find it extremely hard to assign the products
with some indirect costs in accordance with this model. For instance, it becomes
complicated for the managers and as a result, it might minimise their ability in assign the
same with indirect cost. However, all the necessary cost information are provided under the
ABC model due to which popularity is gained in almost all global industries and companies