Activity Based Costing For Beach Energy Limited

Running Head: ACTIVITY BASED COSTING SYSTEM 1
Activity Based Costing For Beach Energy Limited
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ACTIVITY BASED COSTING SYSTEM 2
Executive summary
Breville group limited is a busy company with massive plans and operations. With so
many activities going on in the company, a need for better management as well as a proper
costing system is vital. The following report describes the Breville Company’s mission as well as
objectives and corporate strategies of the company. How activity-based costing, which the ideal
costing and management tool for Breville group limited company, is in alignment with these
strategies and objectives are also addressed. The feature of activity-based costing is ideal and
compatible with most companies operate. An alternative costing method is also briefly discussed.

ACTIVITY BASED COSTING SYSTEM 3
Table of Contents
Introduction.................................................................................................................................................3
Activity-based costing and its features........................................................................................................3
Definition................................................................................................................................................3
Key features of activity-based costing.....................................................................................................4
How ABC costing tool aligns with Breville group limited strategies..........................................................4
The mission of Breville group limited.....................................................................................................4
Objectives of Breville group limited............................................................................................................5
Corporate strategies of Breville group limited.........................................................................................5
How activity-based costing is in alignment with Breville group Limited’s strategies and goals.................7
Recommendations for implementation of activity-based costing system in Breville group limited
Company management................................................................................................................................8
Alternative costing system that could be used in place of activity-based costing system............................9
Conclusion...................................................................................................................................................9
References.................................................................................................................................................10

ACTIVITY BASED COSTING SYSTEM 4
Introduction
Breville group limited is a developing and distributor of small electrical kitchen
appliances. The company owns several brands, Breville, Kambrook, Ronson, a Sage by Heston,
Solis Gastrback, stellar, Catler, bork and Rivera & bar. The company’s business can be divided
into two that is development sector and distribution sector. Due to the high number of activities
to run the two sectors effectively, the company needs the most cost-effective and efficient
management system as well as costing tool. The following report is a description of activity-
based costing and management tool. The system’s distinctive features are also discussed in the
report as well the alignment of these features with company’s goal and strategies. The role of the
system in helping Breville group limited achieve is targets and implement the strategies laid
down is also looked at in the report. The report is finalized by an alternative costing system that
could be used in place of ABC system.
Activity-based costing and its features
Definition
Activity-based costing tool identifies company’s activities and assigns a cost to each
activity concerning resources to all products and services that each activity has consumed.
Activity-based costing approach involves tracing resource consumption and costing the final
product and services in a company or an organization (Zimmerman & Yahya-Zadeh, 2011).
ABC system appreciates the relationship between cost, activities, and products and from this
relationship, indirect costs are assigned to products. The method applies best in the
manufacturing sector. This is because some costs such as salaries and administrative cost
incurred by a company are hard to assign.