Activity Based Budgeting (ABB)
13 Pages3874 Words361 Views
Added on 2021-01-02
Activity Based Budgeting (ABB)
Added on 2021-01-02
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Management Accounting
TABLE OF CONTENTSINTRODUCTION...........................................................................................................................1A) Brief description about client of firm (Holden)................................................................1B) Describing about activity based budgeting and its features..............................................4C) Outlining ways in which ABB is different from traditional budgeting systems...............5D) Discussing whether ABB is suitable to organisation........................................................7CONCLUSION................................................................................................................................9REFERENCES..............................................................................................................................10
INTRODUCTIONManagement accounting plays an important role in every business entity especially inmanufacturing industry. The present report will discuss about activity based budgeting (ABB) incontext of Holden. ABB is replicated as a planning system in which costs are directly associatedwith activities along with budget expenditure which are compiled on the basis of expectedactivity level. This report will give brief description about Holden which consists of its facilities,operations and annual sales of past 10 years. It will give explanation on Activity based budgetingwith its major characteristics in specified organization. In the similar aspect, it will articulatevarious variations among ABB and different traditional budgeting system such as considerationof budget and expenditure of current year. Further, it will provide discussion on the suitability ofABB to Holden.A) Brief description about client of firm (Holden)Holdenwas formerly known as General Motors Holden which is an Australian automobile importer and former manufacturer of automotive. It is headquartered in port Melbourne,Victoria. This organization is main stay in Australian Automobile manufacturing as it tracks itsorigin from year 1856. Many years ago, it was exclusive producer of its car bodies for baseframe of General motor vehicles which are imported into Australia. It is operating under GMHolden Ltd as these two are always linked to each other. In the present era, Holden is consideredas one of only seven fully integrated global General motor’s operations which build, sell anddesign vehicles for Australia and whole world (Holden Overview, 2018).Its main business is to manufacture and distribution of motor vehicles, components, partsand engines. On the current aspect, it has employed approx. 3150 people on national basis. Theoperations of Holden vehicle produce 45 models from six vehicle body style and core vehiclearchitectures for domestic and export customers. It began with Cruze production as fuel efficientglobal and small vehicle which helps for growth of Holden's expertise in manufacturing andengineering of these types of automotive. It consists of press plant and operation of metalassembly, plastics operation, vehicle assembly operation, hardware facility, body assembly andpaint shop.It is the centre of expertise in engineering and design for GM globally. It is one of thenine global design centres which are responsible for vehicles like Chevrolet Camaro and Holden1
Commodore along with main string of global concept related to car for multiple GM brands.Holden is also replicated as a centre of expertise for rear-wheel and large drive vehicles in GMfamily along with powertrain engineering centre with R&D and customer program expertise,LPG and CNG applications (Holden at a glance, 2018).It would be continuing to reflect significant presence in Australia beyond 2017 whichconsists of national sales organization, a national parts distribution centre and global designstudio. In the similar aspect, its leverage of GM's global portfolio which gives the best cars forAustralian market. It is committed for selling Holdens in country from various coming years.Currently, it offers various cars in more segments as compared to before from Barnia small carrange to class leading infotainment via game changing world class VF Commodore range andVolt electric car. It is directly committed for giving the best cars to Australia for viewing full listto Holden world class vehicle.It provides various facilities like:Head office and design as well as engineering centreHolden engine manufacturing operationsHolden vehicle manufacturing operationsAutomotive proving in groundHolden national distribution centreHolden innovationStates sale officeIn the similar aspect, Holden has manufactured more than 7 million vehicles and enginesmore than 10 million for overseas and local sales. It has sent more than 780000 Holden vehiclesacross world in 5 decades and 4 million export engines in 27 years. It is the major representativeof Australia's largest automotive export program. The GM product programs are supported byspecialist Holden engineering services in Asia Pacific region and in Europe as well. Its networkof dealer is very strong as its nationwide Holden network comprises over 200 authorised storesalong with 12 authorised service centres. The dealership of Holden promotes and represents itsservices and products for employing more than 13500 people from entire Australia. Their uniquestrategy positioning is because of technology which is very strong.The trend annual sales of past 10 years is stated as below:2
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