Activity Based Costing System and its Implementation in Brambles Limited
Added on 2023-06-11
14 Pages2931 Words51 Views
Running head: MANAGERIAL ACCOUNTING
Managerial Accounting
Name of the Student:
Name of the University:
Author’s Note:
Course ID:
Managerial Accounting
Name of the Student:
Name of the University:
Author’s Note:
Course ID:
1MANAGERIAL ACCOUNTING
Executive Summary:
In this report, efforts have been made to bring into light the different aspects of the
activity based costing (ABC) system. The purpose of the report is to relate the use of the ABC
system with a business organisation listed on the Australian Securities Exchange (ASX).
Therefore, the organisation that has been considered for meeting the purpose of this report is
Brambles Limited having the ASX code of BXW. It has been identified further that the
enforcement of the ABC model enables the organisations to divide the total costs into variable
costs and fixed costs. Along with this, the management of Brambles Limited could obtain all the
necessary costing information by using the ABC system.
Executive Summary:
In this report, efforts have been made to bring into light the different aspects of the
activity based costing (ABC) system. The purpose of the report is to relate the use of the ABC
system with a business organisation listed on the Australian Securities Exchange (ASX).
Therefore, the organisation that has been considered for meeting the purpose of this report is
Brambles Limited having the ASX code of BXW. It has been identified further that the
enforcement of the ABC model enables the organisations to divide the total costs into variable
costs and fixed costs. Along with this, the management of Brambles Limited could obtain all the
necessary costing information by using the ABC system.
2MANAGERIAL ACCOUNTING
Table of Contents
Introduction:....................................................................................................................................3
Part a:...............................................................................................................................................3
Part b:...............................................................................................................................................5
Requirement i:.............................................................................................................................5
Requirement ii:............................................................................................................................6
Requirement iii:...........................................................................................................................6
Part c:...............................................................................................................................................8
Part d:...............................................................................................................................................9
Conclusion:....................................................................................................................................10
References:....................................................................................................................................12
Table of Contents
Introduction:....................................................................................................................................3
Part a:...............................................................................................................................................3
Part b:...............................................................................................................................................5
Requirement i:.............................................................................................................................5
Requirement ii:............................................................................................................................6
Requirement iii:...........................................................................................................................6
Part c:...............................................................................................................................................8
Part d:...............................................................................................................................................9
Conclusion:....................................................................................................................................10
References:....................................................................................................................................12
3MANAGERIAL ACCOUNTING
Introduction:
In this report, efforts have been made to bring into light the different aspects of the
activity based costing (ABC) system. The purpose of the report is to relate the use of the ABC
system with a business organisation listed on the Australian Securities Exchange (ASX).
Therefore, the organisation that has been considered for meeting the purpose of this report is
Brambles Limited having the ASX code of BXW. It is founded in the year 1875, when it started
a butchery business; however, with the passage of time, it has shifted to transport and logistics. It
is a specialised supply chain logistics group involved in pooling unit-load equipment and related
services. The report would provide information regarding the different ABC model aspects
including its description, features and process of implementation supported by suitable
recommendations.
Part a:
From the business perspective, ABC is considered as a significant costing approach
aiding the business organisations to identify those activities necessary for running their business
operations. Once such activities are identified, it assigns the indirect costs to the concerned
products or services. Thus, it is evident that ABC model determines the relationship among
costs, products and activities, as it is necessary to allocate indirect costs to the products or
services in an effective manner as opposed to the conventional costing approach (Butler and
Ghosh 2015). However, the business managers are often encountered with certain complexities
in allocating some particular indirect costs to the products or services in this costing system. One
such instance could be identified as the staff salaries, in which issues are faced while assigning
costs to the services rendered. On the other hand, it is noteworthy to mention that ABC model
Introduction:
In this report, efforts have been made to bring into light the different aspects of the
activity based costing (ABC) system. The purpose of the report is to relate the use of the ABC
system with a business organisation listed on the Australian Securities Exchange (ASX).
Therefore, the organisation that has been considered for meeting the purpose of this report is
Brambles Limited having the ASX code of BXW. It is founded in the year 1875, when it started
a butchery business; however, with the passage of time, it has shifted to transport and logistics. It
is a specialised supply chain logistics group involved in pooling unit-load equipment and related
services. The report would provide information regarding the different ABC model aspects
including its description, features and process of implementation supported by suitable
recommendations.
Part a:
From the business perspective, ABC is considered as a significant costing approach
aiding the business organisations to identify those activities necessary for running their business
operations. Once such activities are identified, it assigns the indirect costs to the concerned
products or services. Thus, it is evident that ABC model determines the relationship among
costs, products and activities, as it is necessary to allocate indirect costs to the products or
services in an effective manner as opposed to the conventional costing approach (Butler and
Ghosh 2015). However, the business managers are often encountered with certain complexities
in allocating some particular indirect costs to the products or services in this costing system. One
such instance could be identified as the staff salaries, in which issues are faced while assigning
costs to the services rendered. On the other hand, it is noteworthy to mention that ABC model
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