Activity-Based Costing for Blackmore Ltd
Added on 2021-06-16
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Activity-Based Costing for Blackmore LTD 1ACTIVITY-BASED COSTING FOR BLACKMORE LTDStudent (Name)Professor (Name)CollegeCourseDate
Activity-Based Costing for Blackmore LTD 2ContentsExecutive summary.........................................................................................................................3Introduction..................................................................................................................................3Main body........................................................................................................................................4Explanation of ABC model and its features.................................................................................4Features....................................................................................................................................4Blackmores LTD Mission and Objectives.......................................................................................5Mission- What the company strives for.......................................................................................5Objectives.................................................................................................................................5Blackmores LTD corporate strategies.............................................................................................5How activity-based costing (ABC) model aligns with the current goals and strategies of the company...........................................................................................................................................6Recommendations for the implementation of activity-based costing (ABC) model for Blackmores Limited.........................................................................................................................7Conclusion.......................................................................................................................................7References..................................................................................................................................................................8
Activity-Based Costing for Blackmore LTD 3ACTIVITY-BASED COSTING FOR BLACKMORE LTDExecutive summaryWith the propagation of technology and computer related services, the outburst in datacommunication systems, and the rapidly changing trends about globalization, the corporateworld and the mangers in various industries are searching for considerable new ways andmethods in managing and controlling costs. Despite the fact that most of the companies dealingwith online or IT related services have varying degrees of senselessness or intangibility, themajor challenge they face is measuring the costs of the services they deliver. Ideally, Activity-based costing (ABC), an alternative approach to the traditional costs accounting systems, hasbeen used or applied to various industries, for example, the manufacturing and service industries.Consequently, there has been successful enforcement of this system in the insurance, healthcare,and transport industries over the few last years, but very few publications associate ABC to theIT-related firms. This research reports on the cost management undertaking using ABCframework focused on the management division of a vitamin, mineral and herbal supplementsfirm (Blackmore). The requirement for the company to create accurate and explicit rechargerates, aligning the model to the current goals and the strategies of the company in the corporatedomain, how the model helps company achieve its strategies and the recommendation about theenforcement or implementation of this model for the company based on various findings(Askarany et al., 2010). The modeling procedure needs the identification of resources, costsobjects, activities and the forces that correspond closely to the organizational obligations withinthe management parameters. Finally, the resulting framework gives a managerial tool to quantifyproductivity and efficiency for the firm.
Activity-Based Costing for Blackmore LTD 4IntroductionDuring the past two decades activity-based costing (ABC) has been to rated in thesummit of the academic and journals and documented in management accounting textbooks as amodel that upholds accuracy of the product service costing and also guides mangers and thechief executives of the companies in comprehending how resources are utilized across thecompany’s value chains to give strategic results. Because of the activity-based costing, managersare now at peace with the assessment of all the activities in their respective firms and allocate theneeded resources for their implementation with all the processes involved accounted for. Thissystem is very attractive and valuable to the companies in the competitive and stiff environmentsthat require a lot of cost reduction, especially when the traditional or the existing cost systemsfail to address such rational support (Baird 2007). Despite the fact that many firms are aware ofthe contemporary advancements in technology and the global economic environment that hasrendered the traditional cost accounting systems irrelevant, the fact remains that they have toperceive net benefits before enforcing activity-based costing. Because restructuring andreconstructing the required systems are significant and expensive. Regarding Blackmore LTD, in addressing the preempted matters, this study seeks toassess and address the perceived success of ABC in this particular company. Therefore the paperwill address specifically; the requirement for the company to create accurate and explicitrecharge rates, aligning the model to the current goals and the strategies of the company in thecorporate competitive environment, how the model helps company achieve its strategies and therecommendation about the enforcement or implementation of this model for the company basedon various findings.
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