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Activity-Based Costing (ABC) Model

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Added on  2021-05-31

Activity-Based Costing (ABC) Model

   Added on 2021-05-31

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Running head: MANAGERIAL ACCOUNTINGManagerial AccountingName of the Student:Name of the University:Author’s Note:Course ID:
Activity-Based Costing (ABC) Model_1
1MANAGERIAL ACCOUNTINGExecutive Summary:The current report intends to provide brief evaluation of the activity-based costing (ABC)model along with its characteristics from the business perspective. For meeting the purpose ofthis report, the model is associated with an ASX listed organisation for improving themanagement accounting information present to its top management team. In this report,National Australia Bank (NAB) is selected, which is one of the biggest financial institutions inAustralia in terms of earnings, market capitalisation and customers. ABC model is of utmostimportance, as this model helps in identifying those departments or activities generating lowerincome for the bank. As a result, NAB could assign higher costs to those activities based on thecustomer needs for minimising their overall cost along with increasing the awareness of thecustomers. Finally, another management accounting tool that is suitable for NAB is identified asNAB, since the managers of the bank could identify the variances from the actual budget.Accordingly, corrective actions could be taken to minimise those variances and errors inexternal reports.
Activity-Based Costing (ABC) Model_2
2MANAGERIAL ACCOUNTINGTable of ContentsIntroduction:....................................................................................................................................3a) Explanation of activity-based costing (ABC) model and its features:.........................................3b) Alignment of ABC model with the current goals and strategies of NAB:....................................4i) Mission and objectives of NAB:................................................................................................4ii) Corporate strategies of NAB:...................................................................................................5iii) Role of ABC model in achieving the strategies of NAB:..........................................................5c) Two recommendations about the implementation of ABC model for NAB:...............................7d) Suitable management accounting tool suitable for NAB besides ABC model:...........................8Conclusion:......................................................................................................................................9References:....................................................................................................................................10
Activity-Based Costing (ABC) Model_3
3MANAGERIAL ACCOUNTINGIntroduction:The current report intends to provide brief evaluation of the activity-based costing (ABC)model along with its characteristics from the business perspective. For meeting the purpose ofthis report, the model is associated with an ASX listed organisation for improving themanagement accounting information present to its top management team. In this report,National Australia Bank (NAB) is selected, which is one of the biggest financial institutions inAustralia in terms of earnings, market capitalisation and customers. Based on the existing goalsand corporate strategies of NAB, the alignment is made with the ABC model for enabling thetop management of the bank so that suitable decisions could be undertaken. In addition, thereport lays emphasis on providing recommendations regarding the ways the ABC model couldbe implemented in NAB. Finally, the report sheds light on suggesting another managementaccounting tool for NAB that would aid in the decision-making process of the top management. a) Explanation of activity-based costing (ABC) model and its features:ABC model is a method of accounting that identifies the activities performed on the partof an organisation and after this; the indirect costs are allocated to products. In other words,this model realises the association among activities, costs and products and with the help ofsuch relationship, the indirect costs are assigned to products less arbitrarily compared to theconventional models of accounting (Al-Nuaimi, Mohamed and Alekam 2017). ABC modelhas certain features, which are enumerated briefly as follows:
Activity-Based Costing (ABC) Model_4

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