Managerial Accounting: Application of Activity-Based Costing in Resolute Mining

Running head: MANAGERIAL ACCOUNTING
Managerial Accounting
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1MANAGERIAL ACCOUNTING
Executive Summary:
The main interpretation of the report has been taken into consideration with the “activity-
based costing (ABC)” model related to its characteristics, application and from the
perspective of an organisation. In this report, the ABC system is taken into account with
Resolute Mining (listed under ASX), as the company is considered as high value for
enhancing the overall management accounting criteria of higher management of the
company. In Resolute Mining the application of ABC model has a significant role in terms of
detecting particular activities of business and providing special attention. Based on the
nature of analysis, it is conducive for the organisation for allocating the cost to activities
which concentrate mostly in favour of the customers. Lastly, the implementation of
budgetary control is applied in forming alternative management accounting technique for
improving the overall cost efficiency for Resolute Mining.

2MANAGERIAL ACCOUNTING
Table of Contents
Introduction:............................................................................................................................ 3
Answer to Part a:......................................................................................................................3
Answer to Part b:..................................................................................................................... 5
Requirement i:......................................................................................................................5
Requirement ii:.....................................................................................................................6
Requirement iii:....................................................................................................................7
Answer to Part c:......................................................................................................................8
Answer to Part d:..................................................................................................................... 9
Conclusion.............................................................................................................................. 10
References..............................................................................................................................12

3MANAGERIAL ACCOUNTING
Introduction:
The underlying sections of the study has been taken into consideration with the
“activity-based costing (ABC)” model related to its characteristics, application and from the
perspective of an organisation. In this report, the ABC system is taken into account with
Resolute Mining (listed under ASX), as the company is considered as high value for
enhancing the overall management accounting criteria of higher management of the
company. In the mining industry, Resolute mining is recognised as a developer, operator
and explorer comprising of nine Gold mines across Australia and Africa, with a production of
more than 8 million ounces of gold (Resolute 2018). The company has taken major
initiatives in applying ABC system with an intention to enhance its management accounting
system and getting a greater edge in achieving its goals and strategies. Lastly, the
recommendation aspect of the report has enforced the system with organisation along with
suitable management accounting tool depending on Departmental requirements (Ayachit,
Attarde and Kulkarni 2014).
Answer to Part a:
A significant criterion of costing under the ABC model is identified with conduction of
business operation based on which the products are applied with indirect cost. An
augmented focus is related to the activities, costs and products for the apportionment of
indirect costs associated to these with less subjectivity as compared to the conventional
costing system. Despite of this fact, managers often struggle in apportionment of cost with
the help of ABC system and they often comprise of the indirect expenses such as staff
remuneration which cannot be easily apportioned under the manufactured products. Due to