Activity-Based Costing: A Case Study of MYOB Group

Activity-Based Costing
MYOB GROUP

Executive Summary:
ABC costing or in other words ‘Activity Based Costing’ is a type of accounting method that
includes all the activities that a company performs and assigns indirect cost to them based on the
importance of various activities. Historically, ABC costing was based on two popular concepts:
George Staubus Activity Costing and Input-Output Accounting. For the very first time, it was
developed in 1970’s and 1980’s in the United States. ABC costing deals with three important
parameters: cost, activities and products and evaluate how change in one affects the other. ABC
concept differs from traditional method in the way it assigns indirect cost to the process and the
products. Indirect costs refer to the cost which cannot be directly measured. For example: Salary
of the workforce. For the same reason, it has found important in various industries especially
those dealing with many indirect costs such as manufacturing sector. The ultimate aim of ABC
costing is to convert all indirect costs to direct one and have an idea which activity costs how
much. This would help to identity the co-relation between cost incurred and profit gained from
each activity of the process. In this assignment, we analyze the impact of ABC costing on
MYOB Group. MYOB is an Australian company that provides business POS, CRM websites,
tax etc. We have broken various cost incurred by the company and rank them on how they
generate profit from those activities.
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Contents
Executive Summary:........................................................................................................................2
Introduction:....................................................................................................................................4
ABC Model and its features:...........................................................................................................5
Alignment of corporate goals and strategies with ABC model.......................................................6
MYOB Group Mission and Objectives...........................................................................................6
MYOB Group Corporate Strategies................................................................................................7
Assistance of ABC model in achieving MYOB Group’s Strategies:..............................................7
Recommendation for implementation of ABC model:....................................................................8
Alternative Management Cost tool for MYOB group.....................................................................8
Conclusion:......................................................................................................................................9
References:......................................................................................................................................9
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