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Concept of Activity Based Costing - Doc

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Added on  2021-05-27

Concept of Activity Based Costing - Doc

   Added on 2021-05-27

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Running head: MANAGERIAL ACCOUNTING Managerial AccountingName of the Student:Name of the University:Author’s Note:
Concept of Activity Based Costing - Doc_1
MANAGERIAL ACCOUNTING 1Executive SummaryThe main purpose of this assignment is to analyze the financial statement of a company in orderto understand the internal structure of the business and also recognize the performancemanagement tool which is used by the company. The company for this assignment as selected isTelstra ltd. The assignment will be discussing the concept of Activity Based Costing (ABC) andalso its features. The assignment will then be providing recommendations as to how themanagement of Telstra ltd can adopted ABC method and implement the same.
Concept of Activity Based Costing - Doc_2
MANAGERIAL ACCOUNTING 2Table of ContentsIntroduction......................................................................................................................................3Overview of the Company...............................................................................................................3Activity Based Costing Model and its Features..............................................................................3Alignment of the Goals and strategies of the Business with Activity Based Costing.....................4Mission and Objectives of Telstra ltd..........................................................................................5Corporate Strategies.....................................................................................................................5Role of ABC Model in Achieving the Strategies of the business................................................6Recommendations about Implementation of ABC Model for Telstra ltd.......................................8Alternative Management Tool which can be used by Telstra ltd....................................................8Conclusion.......................................................................................................................................9Reference.......................................................................................................................................10
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MANAGERIAL ACCOUNTING 3IntroductionThe assignment deals with the techniques of with the technique of Activity BasedCosting (ABC) and the features of the same. The company selected for which implementation ofABC method is to be applied is Telstra ltd. The assignment will be analyzing whether the ABCtechnique is applicable to the business or not. The assignment will be recommending suggestionsfor implementation of ABC model in the business of Telstra Ltd.Overview of the CompanyTelstra company is engaged in telecommunication business and the business provides awide range of connectivity, media and content to the customers of the company in Australia. Thecompany is regarded as one of the leading brands in telecommunication industry. The companyis also engaged in providing telecommunication and enterprise services globally as well(Telstra.com.au. 2018). The company is committed in pursuing innovation and better servicegeneration so as to provide its customers with better quality of services.Activity Based Costing Model and its FeaturesABC model is one of the popular methods which is used in accounting which identifiesthe activities of the business and allocates the indirect cost of the business on the basis ofappropriate activities which were identified (Dale and Plunkett 2017). The method establishesthe relation between activities of the business, costs which are indirect in nature and the productswhich are produced and effectively appropriates the costs of the business on the basis of suchactivities. In some cases, it is complex to assign tasks on the basis of activities of the business(Frazier 2014). An example can be given of depreciation which is difficult to allocate to aspecific product when there are multiple products which is produced by the business.
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