Implementing Activity Based Costing Model in Dulux Australia

This report delves into the application of the Activity-Based Costing (ABC) model within Dulux Australia, a prominent player in the paints market. It emphasizes the model's role in identifying key organizational activities and allocating costs to products and services based on actual consumption. The analysis covers Dulux Australia's mission, vision, and business strategies, highlighting how the ABC model can enhance corporate governance and improve business processes. Recommendations are provided for asset management and business support to ensure a smooth transition to the ABC model. The report also explores accounting management tools such as the Balanced Scorecard and value chain analysis, which aid in evaluating business performance and identifying areas for improvement. The conclusion underscores the importance of accounting management techniques in fostering an effective internal environment and supporting long-term organizational success. Desklib provides solved assignments and past papers for students.

Table of Contents
INTRODUCTION...............................................................................................................................................2
ABC MODEL..................................................................................................................................................2
MISSION AND VISION.............................................................................................................................2
BUSINESS STRATEGY.......................................................................................................................................3
APPLY THE ABC MODEL..................................................................................................................................3
RECOMMENDATIONS.......................................................................................................................................4
ACCOUNTING MANAGEMENT TOOLS................................................................................................................4
CONCLUSION..................................................................................................................................................5
REFERENCES...................................................................................................................................................5

INTRODUCTION
ABC model in the accountng system is tend to be one of the important aspect as it assist the
management in identifying the key activities in the organisation and then allocate the cost of
respective activity to the products and services based on the actual consumption by each products
and services. The main purpose of this activitiy is to apprehend the importance of activity based
costing in a leading business enterprise and suggest the implementation of ABC model in that
organisation. The business enterprise which is considered for the analysis is Dulux Austarlia, the
company is a key player in the paints market, the business become a leading group after the
acquisition of ICI PLC by purchasing 62% of the company as part of enhancing the market
share. The company was previously acted as a wholly owned subsidary of Orica group, this was
until 2010, after which the company Dulux Group was incorporated as a separate company. The
company is a leading player in various paint markets which includes autmotive aspects,
decoration purpose for house and other areas, industrial, coatings and refinish.
ABC MODEL
The ABC model is an accounting method that enables a company to link resource-based costs to
the business process, not just products or services. Use this template to share and distribute
features and other costs associated with products commonly used. It should be noted that the
ABC cost system does not exclude costs and, on the other hand, helps provide more detailed
information about product-based views and costs. . The main advantage of the cost-based
business model is that it allows the manager and data controller to understand indirect costs and
product-based products. Management can improve profitability by accurately tracking overall
costs and performance, improving business process efficiency and identifying costs at different
levels of production or service. In addition, this model encourages the organization to focus on
improving the quality of products and services, such as TQM, and constantly improving the
process, which improves the design and control of the organization's various processes. . and are
willing to work with business strategy to make effective decisions. With the help of the ABC
cost model, the company identifies waste and / or processing efficiency and takes steps to
eliminate its activity without activity. In addition, the ABC cost method helps managers to make
clear decisions about prices, construction or purchases, budgets and forecasts, etc., which mainly
includes construction costs. (Frykman,, 2009)
MISSION AND VISION
The company's main goal is to increase the company's growth in a sustainable manner and
increase the value of all stakeholders, including employees, customers, suppliers, shareholders,
business partners and communities. The company tries to take precautions to avoid the negative

effects of individuals, communities and the environment and try to develop best practice in
industry. The company has a firm mandate to introduce security measures to protect the
environment in a sustainable way for corporate integration. (Damodaran,, 2016)
BUSINESS STRATEGY
Corporate management primarily controls the diversification of the business portfolio, sells and
sells different products and sells them in different geographic areas and currencies. This
improves business efficiency and reduces the impact of business circles and corporate circles on
the organization. The company wants a good profit for all interested parties. The management
works clearly with a wider business strategy that is viable in long-term processes, identifies
opportunities for expansion and use of resources and resources. sustainable way. (Tirole, 2016).
The driver's goal is to reduce operating costs and increase efficiency, improve new
manufacturing methods, reduce internal automation and robotics costs and automate operations
for all. continued development of methods based on business model. The business management
model is very simple and surprising in all business areas, which creates a competitive advantage
in the process, improves work, organizational measures and performance. The management has
implemented SAP Process Control, which ensures that the company has the usual way of
implementing the process. Management has a global perspective and defines criteria that ensure
continuity of supply, effective measures, sustainable management systems and asset
management. (Vernimmen, 2011). The company's goal is to influence the global application of
standards across all asset classes based on international standards. Management always has
detailed planning and effective work contracts and clearly supports training and access to
creative decisions.
APPLY THE ABC MODEL
The main purpose of the management is to consider the ABC model as a business model that
improves corporate governance through old, present and future business. The use of the ABC
model requires significant management support and commitment. auditors need to improve the
business process and accounting conditions for carrying out the ABC analysis. (Bodie, 2010).
The template should be limited to previous information, budget and information and information.
Cost allocation costs must determine the costs and data specified in the model that will
reorganize the cost segments of the different segments in each segment, resources and services,
and evaluate the processing and sales of the company's products. By implementing the ABC
model, auditors can prepare and report to senior executives who will help them make decisions
about design, procurement, budgets and other areas in time. (Feldman, 2015)
ABC is a clear and sophisticated tool for the total spending budget that generates business
forecasts, including revenues, investments and other key milestones. This model will be a clear
tool for tracking future expenses, planned and surplus stocks or shortages. The amount and
budget information contribute to the removal of waste and to avoid incorrect processing
activities. This model helps the management to clearly understand the error margin in the
manufacturing process. It should be noted that in the current competitive environment, financial

failures can not be solved, management needs to better understand resources, prices, investment
budgets, production lines and technical aspects. Drivers must better analyze the competitor and
be aware of the cause and effect, which is the cost and commitment to the development of the
process. These estimates allow management to achieve production costs, allocate resources
efficiently, allocate all costs and improve company profitability. (Eun, 2015)
RECOMMENDATIONS
Asset Management: The organization's management must be creative and provide all the
resources of the accounting team for carrying out the ABC analysis. It should be noted that
implementation of the ABC model in the business model is a strategic decision, which means
that auditors and financial managers choose to improve business processes.
Business support: The business process goes beyond geographical boundaries, so management
must engage entrepreneurs in a smooth transition of ABC's business model. The company may
request new and innovative technology for commercial support and apply the ABC model in an
appropriate location.
ACCOUNTING MANAGEMENT TOOLS
Balanced Scorecard is one of the most important ways to do business. The rest helps the
company and management, especially the auditor, to evaluate the machine's protection and
investment. The rest is too low for financing, purchasing, innovation and internal analysis of the
company. Scorecard Scale contributes to the company's work in line with the company's vision
and long-term strategy. The dashboard contains financial plans, internal perspectives,
organizational skills and finally customer perspectives. One of the most important benefits of
Balanced Scorecard is to improve the process and encourage employees to achieve
organizational goals. In particular, employment growth, especially the analysis of consumer
satisfaction, examines the process of increasing economic profitability. Internal perspective:
(Douglas, 2011). The internal perspective is largely linked to a business concept that defines the
individual personality, depending on the customer's needs. The boss should focus on critical
activities to meet customer needs. Organizational capacity: linked to efficiency and
organizational innovation. Companies like IBM and SAP ERP, which are part of Balance
Scorecard, are included in understanding innovation opportunities. Customer data must be based
on recognition that customers are satisfied with the products and services they are looking for:
they handle products and customers with information related to the service so that the customer
relies on customer satisfaction and innovative products. Economic Plan: Data collection and time
are still critical at this stage and the Agriculture Minister provides financial requirements for the
analysis of financial information.
Value chain analysis is another way of analyzing production costs. Value chain analysis is based
on the delivery of finished products at different production or process phases. One of the key
benefits of value-added analysis plays an important role in the development of high-quality
business customers. The tool is used to analyze the activity, value chain and evaluation and

design. Business Analysis: Businesses must now identify activities that help produce goods and
services. Value analysis: Analyze the value chain, value added to each production phase and
create valuable products. Evaluation and Planning: Finally, we evaluate the plan that evaluates
possible changes and action plans. The company is based on the relationship. These quotas show
the company's actual capacity and growth. The business case contains several indicators that help
the company and the investor to understand that the business generates profits or losses. In
addition to profitability and business accounting, return on investments and operating income
includes sales of goods and services. This is one of the most important tools that show the actual
cash flow and the actual business activity.
CONCLUSION
It turns out that accounting management is very helpful in supporting long-term organizations.
Account management techniques help to create an effective internal environment for
organizations. Use different tools and techniques to describe your eyes and ears for your
thoughts. ABC's costs are largely based on activities carried out during the manufacturing
process. In addition, TQM technology is a technology that provides quality products and services
to the organization, reduces waste and improves productivity. Finally, the auditors are
responsible for managing the internal financial system through planning and monitoring,
monitoring, decision making and law enforcement.
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REFERENCES
Bodie, Z., Kane, A., Marcus, A. J., Perrakis, S., & Ryan, P. J. (2010). Investments. Canada:
McGraw-Hill Ryerson.
Brealy, R & Myers, S (2011). Principles of Corporate Finance. New York: McGraw-Hill.
Damodaran, A. (2016). Valuation approaches and metrics: A survey of the theory and evidence,
Stern School of Business.
Douglas Hubbard. (2011). The Failure of Risk Management: Why It's Broken and How to
Fix It. pg. 46, John Wiley & Sons
Eun, C & Resnick, B (2015). International Financial Management. New York: McGraw-Hill.

Feldman, S. J. (2015). Principles of private firm valuation. New Jersey; John Wiley & Sons
Inc
Frykman, D & Tolleryd, J (2009). Corporate Valuation: An easy guide to measuring value.
UK: Prentice Hall.
Tirole, J. (2016). The Theory of Corporate Finance. Princeton University Press, 1st edition.
Vernimmen, P. (2011). Corporate finance: Theory and practice. John Wiley & Sons.
England.