Activity Based Costing for Resolute Mining: A Strategic Analysis

This report provides an in-depth analysis of the Activity Based Costing (ABC) model and its potential application within Resolute Mining. The report begins with an executive summary and an introduction that highlights the importance of ABC in modern business environments. It then delves into the specifics of the ABC model, explaining its features and advantages over traditional costing methods. A case study of Resolute Mining is presented, exploring the company's mission, objectives, and business strategies. The report assesses how ABC can benefit Resolute Mining by improving cost allocation across various departments and processes, especially in areas like raw material, material process, and other programs. Recommendations are provided for implementing the ABC model, including identifying cost drivers and performing cost-benefit analyses. The report also suggests alternative managerial reporting tools, such as lean management, and concludes by summarizing the benefits of ABC for Resolute Mining, emphasizing its role in enhancing cost management and strategic decision-making.

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EXECUTIVE SUMMARY
With the increasing complexity of the busienss organization, every company should
indulge in implementing ABC model for effective recording of cost in the business. It is
observed that activitity based costing model is the main effective tool which could be
undertaken by the company to record the costs and expenses of company. In this report,
Resolute Mining Company has been taken into consideration to evaluate use and
effectiveness of the ABC costing model in business.

Table of Contents
EXECUTIVE SUMMARY........................................................................................................3
INTRODUCTION......................................................................................................................3
ACTIVITY BASED COSTING- A MANGERIAL ACCOUNTING TOOL...........................3
EXPLAINATION..................................................................................................................3
FEATURES............................................................................................................................3
ALLIGNMENT OF ACTIVITY BASED COSTING MODEL: CASE STUDY OF
RESOLUTE MINING LIMITED..............................................................................................4
MISSION AND OBJECTIVES.............................................................................................4
RESOLUTE MINING BUSINESS STRATEGIES...............................................................4
BENEFITS THAT ACTIVITY BASED COSTING MODEL CAN ADORN RESOLUTE
MINING WITH.....................................................................................................................5
RECOMMENDATIONS: IMPLEMENTATION OF ABC MODEL IN RESOLUTE
MINING.....................................................................................................................................7
ALTERNATE MANAGERIAL REPORTING TOOL FOR RESOLUTE MINING...............8
Conclusion..................................................................................................................................8
References..................................................................................................................................9

INTRODUCTION
In this report, discussion regarding the ABC costing model and implemented strategic
work program has been taken into consideration. This ABC costing model is used to allocate
the direct and indirect cost in the different process system of an organization. This costing
model is the best way to allocate the cost in different work process department. In this report,
Resolute Company has been selected to determine the usefulness of the ABC costing model.
In the end, recommendation has been given to identify which costing model would be used
by organization.
ACTIVITY BASED COSTING- A MANGERIAL ACCOUNTING TOOL
EXPLAINATION
This ABC costing model focuses on the substance of an expense unlike the traditional
costing model. It identifies the better option for the allocation of the costing in business. ABC
Costing model is accompanied with the process which is used to allocate the expense on the
basis of their related cost drivers. This ABC costing model is useful in manufacturing sectors
as it is prominent to bifurcate the overhead costs in the different process rate (Öker, and
Adıgüzel, 2016).
FEATURES
The cost is accompanied with two aspects such as fixed and variables. The direct cost
and indirect cost is further divided into flexible and variable costing. It is easy to make
bifurcation in the variable cost on the basis of its occurrence to the separate department but in
case of indirect overhead, ABC costing model helps in allocation of expenses in different
departments. ABC costing model has several benefits which will assist Resolute Mining to
lower down its cost of production. It also increase the recording system of the costs in the
books of accounts of company.
ABC costing model uses the cost drivers to allocate the overhead costing in other process.
The allocation of the cost is based on the related work functions and activities of the business.
ABC costing model assists management to take all the imperative decisions in effective
manner.

This costing model will reduce the overall expenses costing and will eventually increase the
overall outcomes of the business.
The new ABC costing model assists in bifurcating the expenses in different department on
the basis of cost drivers (Tsai, et al. (2015).
ALLIGNMENT OF ACTIVITY BASED COSTING MODEL: CASE STUDY OF
RESOLUTE MINING LIMITED
MISSION AND OBJECTIVES
Resolute mining has been indulged in providing the provision of gold mining and
mineral exploration services around the globe.
The main objective of Resolute Mining is to implement the strategic program and
implemented strategies with a view to achieve cost leadership in market. It also uses the
different strategic program to establish the nexus these objectives are on remuneration
committee (Öker, and Adıgüzel, 2016).
RESOLUTE MINING Corporate BUSINESS STRATEGIES
The resolute mining focuses on providing the customized services to its clients with a
view to satisfy their needs and demand in determined approach (Mahal, and Hossain, 2015).
To avoid the issues and problem associated with the ethical program, company has
started new policy program such as anti-bribery program and implementing clients based
strategic approach (Papadaki, and Popesko, 2016).
It has also increased the sustainability of its business by investing at least average 5 %
of its net average earning (Dyas, et al. 2015).
The proper code of conduct, employee oriented policies and CSR activities have been
followed by Resolute Mining to win over the market and delivery the best result to society.
BENEFITS THAT ACTIVITY BASED COSTING MODEL CAN ADORN RESOLUTE
MINING WIH CORPORATE STRATEGY
o Resolute mining has been running its busienss on international level. It has to
incur its cost in several departments such as costing for the buying raw

material, material process expense and other programs (Kazemi, and Zadeh,
2015).
o The reportable segment of Resolute mining includes Ravenswood, Syama,
Bibiani, Corporate/other and Treasury. However, due to the increasing
complexity, the allocation of the cost incurred becomes complex in separate
work department (Shander, Ozawa, and Hofmann, 2016).
o The ABC costing model should be used by company to make the allocation of
its costing in different departments. It allocates costs on the basis of cost driver
and time driven activity. It is highly recommended for the Resolute to
implement the ABC costing model in its business (Namazi, 2016).
(Resolute Mining, 2017).

(Resolute Mining., 2017).
RECOMMENDATIONS: IMPLEMENTATION OF ABC MODEL IN RESOLUTE
MINING
The resolute mining should evaluates all the required perquisite of the ABC costing
model. It starts with the identification of the nature of overhead based on its activities. For
instance work hours, labour units, machine usage and inspection checks are the main cost
drivers. Once these cost drivers are set the allocation of the overhead to its different process
department should be done (Douissa, and Jabeur, 2016). It is observed that ABC model for
effective recording of cost in the business if Resolute mining uses this tool then it will add
value to its costing recording system in effective manner. It is observed that activitity based
costing model is the main effective tool which could be undertaken by the company to record
the costs and expenses of company

The proper strategic program and team work sprit should be implemented before adopting
ABC costing model in business (Tsai, et al. 2015).
The main recommendation which is given to resolute mining is related to implement the cost
and benefit analysis. It assists in implementing the strategic work process and increase the
value of the investment for adopting the new ABC costing model.
ALTERNATE MANAGERIAL REPORTING TOOL FOR RESOLUTE MINING
Resolute mining is indulged in mining and gold busienss and so it is obvious that it
will have high wastage and overhead. The main alternative method which could be used in
place of ABC costing model is related to lean management. It is the technique of the
management reporting tool which is used by company to value the customers and books the
values in the recorded books.
The lean management assists in implementing the strategic program and implementing the
customized busienss for attracting more clients in market (Hoozée, and Hansen, 2017).
The main thing which should be noticed by resolute mining is related to identify the
cost incurred in both models. After that possible changes would be considered by the
management of company that whether the new system adopted will add value to organizing
or not. It will also be considered by the Resolute Mining that by adopting new method, it will
reduce wastage, quality should not be compromised with (Tsai, et al. (2015).
Conclusion
After analysing all the details and case study of the ABC costing model, it could be
inferred that ABC costing model has several benefits which will assist Resolute Mining to
lower down its cost of production. However, proper bifurcation of the expenses in different
department will increase the value of its capital. There are several costing methods and tools
which could be used by Resolute Mining to add value in its business. ABC Costing model is
most suitable method for the company as it is easy to determine the cost drivers to bifurcate
or allocate the cost in different work process department of organization. Now in the end, it
could be inferred that ABC costing model assists organization to win over the market and
reduce the overall costing of its products in determined approach.

References
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