Activity Based Costing for TFC Business

This presentation discusses the use of Activity Based Costing for the TFC business of Allied Office Products. It explores the calculation of costs, distribution services costs for customers, profitability analysis, and the implementation of the SEP pricing system. The presentation also provides managerial advice for Allied Office Products.

Table of contents
• Introduction
• Company Overview
• ABC"-based services costs for the TFC
business
• Distribution services costs for "Customer A"
and "Customer B.
• The profitability of these two customers
• TFC implement the SEP pricing system
• Managerial advice do you have for allied
about the Total Forms Control (TFC) business
• Conclusion
• Reference List

Introduction
• The project will consist of the calculation of
the activity based costing that is done by
different organisations.
• This helps the organisations to solve a lot of
problems of finance that occurs in a lot of
organisations.
• These are vital for the business firms to work
properly and execute those plans that are
available for the business firms.

Company Overview
• The company that is selected for the research of
the project is Allied Office Products.
• This is a multinational company that is operated
from the United Kingdom.
• The headquarters of the company is located in
London, United Kingdom.

Company Overview
• There are more than fifty thousand employees
working under the company.
• The company Allied Office Products works
under the domain of retail supermarkets. These
are very important overview that is provided for
the company.
• The company Allied Office Products works
under the domain of retail supermarkets. These
are very important overview that is provided for
the company.

ABC"-based services costs for the TFC business
Rent 1211
Depreciation 177
Utilities 159
Security 3
Total Storage Expenses 1550
Rent 214
Depreciation 31
Utilities 28
Salaries and Fringes 909
Telephone 96
Taxes/ Insurance 104
Travel/ Entertainment 30
Postage 56
Hourly Payroll and fringes 316
Temp Help 17
Total requisition handling expenses 1801
Variable warehouse pay and fringes 1735
Travel and entertainment 10
Total Warehouse Activity 1745
Basic Warehouse Stock Selection 761
Pick-Pack activity 734
Desktop Delivery 250
Data Processing Expenses 612
Total 5903

ABC"-based services costs for the TFC business
• The use of Activity based costing is very
important for the organisation Allied Office
Products.
• This helps the company to work properly and
the calculation is done on the basis of the
activities that are done by the company.
• These are very important ways of calculating
costing that will give proper results for the
company.

ABC"-based services costs for the TFC business
• These are very important for the business firms
to work properly on the different kinds of factors.
• So that these issues are solved by the business
firms that do not cause any kind of problems in
the organisation and as well as for the customers
those who go to buy the products.

Distribution services costs for "Customer A" and
"Customer B.
Activity Based Costing
Particulars Customer A Customer B Total
Administration 4 2 6
Production 6 3 9
Delivery 6 2 8
Indirect cost 16 7 23
Total 32 14

Distribution services costs for "Customer A" and
"Customer B.
• The distribution cost of the two customers that
are available for the business firm Allied Office
Products.
• These are important for the business firms to
work on.
• It can be seen that the distribution costs that are
added are administration cost, production cost of
the material, delivery cost associated with the
product and the indirect cost that is incurred over
the products.

The profitability of these two customers
Rent 1211
Depreciation 177
Utilities 159
Security 3
Total Storage Expenses 1550
Rent 214
Depreciation 31
Utilities 28
Salaries and Fringes 909
Telephone 96
Taxes/ Insurance 104
Travel/ Entertainment 30
Postage 56
Hourly Payroll and fringes 316
Temp Help 17
Total requisition handling expenses 1801
Variable warehouse pay and fringes 1735
Travel and entertainment 10
Total Warehouse Activity 1745
Basic Warehouse Stock Selection 761
Pick-Pack activity 734
Desktop Delivery 250
Data Processing Expenses 612
Total 5903

The profitability of these two customers
• The profitability of the two customers of
Allied Office Products.
• there is a lot of cost that is incurred by the
company in selling the product to customer A.
• the profit by selling the product to customer B
is six.

TFC implement the SEP pricing system
• There is a necessity for the TFC to implement the
SEP pricing system.
• This is necessary for the business firms to set one
price for the same product.
• These will help the business firms to work
properly so that the issues are solved and there
are same prices for all the customers of the
organisation.

TFC implement the SEP pricing system
• It is better for the organisations to have equal
pricing strategy for all the customers
• This will help them to analyse the price and fix
the price in such a way that they get the same
amount of profit from the customers by selling
the product at the same price to all the
customers.
• These are such things that takes part in the cost
of the product.

TFC implement the SEP pricing system
• This is the only way by which the cost of the
product will become same.
• The product can be sold at the same price that will
bring in good profit for the organisation.
• These are such things that takes part in the cost of
the product.

Managerial advice do you have for allied about
the Total Forms Control (TFC) business
• There are a number of advices
that is necessary for the
business firm to be given.
• Their main reason is the use of
the technique of costing.
• The next thing that is to be done
by the organisations is that, they
need to fix the cost of
production of the products.

Managerial advice do you have for allied about
the Total Forms Control (TFC) business
• This can be done with the use of the single exit
price.
• The organisations fix the price of all the products
and sell those products at that given price.
• These are the things that are to be followed.

Conclusion
• The project consists of the calculations of the
different areas that are responsible for the
business firms to follow.
• For a business firm like Allied Office Products, it
is not suitable for the company to have different
pricing strategy for different customers.

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