Individual Case Study: Cost and Performance of Tourism and Hospitality

This case study analyzes the cost and performance management within the tourism and hospitality sector, focusing on a scenario involving event planning during the Christmas holidays. The assignment examines two potential event offers, applying the Activity Based Costing (ABC) method to evaluate costs, which are categorized into direct, indirect, and semi-variable costs. The analysis includes an in-depth discussion of cost drivers, budget preparation, and the application of project cost management tools. It explores cost control techniques, budget estimation, and the importance of accurate cost allocation for decision-making and profitability. The student evaluates the effectiveness of ABC in providing accurate product costs and supporting better decision-making. Furthermore, the assignment highlights the significance of cost control techniques and pricing strategies within the context of project budget management, concluding with recommendations on which event to pursue based on cost-effectiveness.

Running head: COST AND PERFORMANCE OF TOURISM AND HOSPITALITY
COST AND PERFORMANCE OF TOURISM AND HOSPITALITY
Name of the student:
Name of the university:
Author Note:

COST AND PERFORMANCE OF TOURISM AND HOSPITALITY 1
Table of Contents
Introduction................................................................................................................................2
Discussion..................................................................................................................................2
In Response to Task 1............................................................................................................2
In Response to Question 2......................................................................................................4
In Response to Question 3......................................................................................................5
Conclusion..................................................................................................................................8
References..................................................................................................................................9

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Introduction
The case study is particularly based on the Dalton events, which is actually conducted
during the Christmas holidays in various cities. The DOSM actually got two offers from two
different organization. As a part of the Dalton Event Australia Pvt Ltd, it is significant to
choose the particular event actually suitable for the business. The fundamentals of the cost
drivers, which are fixed cost, variable cost and semi variable cost, involved in the business.
The activity based cost driver is utilized in the conducted case study which actually shows the
various types of cost included with the business. On the other side, budget is prepared based
on the information provided in the two budget.
Discussion
In Response to Task 1
In case of the two study, the cost driver applied in this case is particularly based on
the Activity Based Costing method. The cost or expenses, which are involved in that case, are
further divided into two categories which are direct and indirect cost. The first event in this
case is Dalton event and the second event is Yoga event are basically the two potential offers
along with the relevant cost which are involved in the business. The management system is
both the cases are expecting changes based on the situation may arise in the organization. The
cost is divided into three main segment, which are the Venue related cost, social media cost
and advertising (Najjar, Strickland & Kaplan, 2017). There are areas where the cost may be
increased or reduced based on the situational analysis of the information, provided in the
comment section.
The venue related cost which is involved in this case is the variable cost, social media
cost are the fixed cost and the advertising cost are basically considered as the semi variable

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cost in nature. The activity based costing actually consists of two types of cost which are the
direct and indirect cost involved in the business (Prahlad et al., 2015). The activity based
costing considered as the approach needed to be undertaken in order to monitor the cost
based on the final consumption. The cost of the company is based on the demand or the type
of task needed to be undertaken by the management system. In case of accepting the task
certain detailed evaluation process are needed to be undertaken involved in the business. The
various cost are considered which is included in the event and considerable factors associated
with it (Netten & Beecham, 2018). The cost driven expenses are based on the classification of
the three categories which are the venue cost, social media and advertising cost in the
business. Each and every organization objective is to reduce the variable cost which are
involved in the business. The fixed cost on the other hand will not be reduced based on the
classification in the cost driver.
The manipulation of the expenses in that case are required by the business in order to
enhance the profitability of the company. It is important to report the DOSM regarding the
various types of cost which are involved in the business. The cost in that case must be
managed based on the certain circumstances involved in the business along with the certain
factors involved with it. The cost driven factors are related to the expenses which are
involved in the business. Both the cost, which are involved with the task, critically analyzed
and accordingly the nature of cost are evaluated at the same time. The cost control technique
is only possible if the business actually implements the activity based costing technique
which means that the proper allocation of cost involved with it.
The cost are basically driven to sale and other factors which are involved with it by
considering all the expenses associated in the business. There are actually some of the
advantages of the activity based costing which is that it provides the accurate product cost, all
the information which are related to the cost behavior, tracing the activities which are related

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to the cost object and helps for the better decision making. Such approach of costing method
towards the business provides effective cost management system, excess capacity and cost
reduction and certain benefits of the service industry associated in that case. The activity
based costing provides the transparent view regarding the development of the activity based
budgeting technique involved in the business (Laustsen, 2016). The activity based costing
method provides a transparent glance into the information to be provided in the business with
the purpose to enhance the significant profitability regarding the task which is associated in
this case. The DOSM must take the cost driven initiative to understand which is the suitable
task based on the overall cost which will be incurred by the business.
In Response to Question 2
The cost control techniques actually falls under the project cost management tools
while preparing or rather estimating the budgets of the organization. The various elements of
the project cost management system of the company involves the following parameters. The
parameters in that case are estimation of cost, budgeting, project performance measuring,
easy to prepare reports based on case study, affordable and the involvement of the integration
related to the third party (Goh & Sun, 2016). While preparing the budget of the company
some of the important facts are needed to be considered by the company. It is significant for
the company to prepare the budget based on the certain factors involved with it. The changes
or rather the variable cost factors of the company must be tracked by the management system
and accordingly manipulation of the project change must be done for enhancing the cost
control techniques in the business. The implementation of the project cost control technique
will enable the management system in that case to enhance the profitability position of the
company along with the other factors which are involved with it.
In the cost management plan there are some of the factors involved in the business
including the cost variance plan, various cost management approach of the company, cost

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estimation, cost control and reporting process are further involved in the project budget cost
of the business (Margolies & Hoddinott, 2015). One of the basic limitation of the study is that
the project cost management tool will further help the business of the company to find the
significant features which are involved with it. The adoption of the cost control technique is
quite user friendly for the business along with the significant factors of the business (Clifton
et al., 2019). The cost, which is allocated while preparing the budget of the company, must be
identified and analyzed in a detailed manner. The user-friendly system of the company will
further manage the productivity of the team and along with that needed by the company to
struggle regarding the implementation of the tools. The significant price, which is set by the
company at the time of preparing the budget, considered as the significant factor in the cost
budget techniques. The implementation of the project control technique in that case is low
which actually helps to increase the productivity of the business by reducing the costs at the
same time. The project management tool further helps to enhance the productivity of the
work, reduce the potential risk associated with it and evaluate the cost involved with the full
life cycle of the projects involved in that case. This are some of the significant cost control
techniques and the pricing driver in that case are important for the business to analyze the
profitable condition in the company (Cooper, 2017).
In Response to Question 3
The budget estimation based on the provided information of task 1 has been provided in that
case bellow:

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The budget estimation based on the provided task 2 has been provided in that case bellow:

7COST AND PERFORMANCE OF TOURISM AND HOSPITALITY
Working related to the labour hour cost driver:
The budget estimation of the two task are provided in that case along with the detailed
estimation of it based on the provided information’s of the two given task of the company.
Based on the activity based costing technique the detailed process of the company along with
the various facts associated with it. As per the detailed evaluation it can be said that the cost
driver technique is effective and task 1 will be appropriate for the company to choose the

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technique involved in that case. The variation or the changes, which took place in the cost
driver technique of the company, are minimum in case of the semi variable cost involved in
the business (Dale & Plunkett, 2017). The profit margin of the company is based on the
information provided in that case along with the associated factors associated with it. In case
of the task 2 the variation is actually higher in comparison to the other factors involved with
it. The profitability position of the company is based on the information or rather the margin
provided in that case. The estimation of the sales in that case is made accordingly.
Conclusion
The cost driver techniques, which is the activity, based costing method of the
company helps the business of the company to flourish. The variance of the company have
been estimated based on the situational aspects of the company which may occur in the
future. The each and every element in the business has been properly ordered based on the
cost driver technique involved in the business along with the other aspects which are
associated with the company. It is better for the company to choose the task 1 or rather
activity 1 based on the detailed evaluation of the business associated in that case.

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References
Clifton, M. B., Townsend, W. P., Bird, H. M., & Albano, R. E. (2019). Target costing:
market driven product design. CRC Press.
Cooper, R. (2017). Target costing and value engineering. Routledge.
Dale, B. G., & Plunkett, J. J. (2017). Quality costing. Routledge.
Goh, B. H., & Sun, Y. (2016). The development of life-cycle costing for buildings. Building
Research & Information, 44(3), 319-333.
Laustsen, A. H. (2016). Snakebites: Costing recombinant antivenoms. Nature, 538(7623), 41.
Margolies, A., & Hoddinott, J. (2015). Costing alternative transfer modalities. Journal of
Development Effectiveness, 7(1), 1-16.
Martinez-Sanchez, V., Kromann, M. A., & Astrup, T. F. (2015). Life cycle costing of waste
management systems: Overview, calculation principles and case studies. Waste
management, 36, 343-355.
Najjar, P. A., Strickland, M., & Kaplan, R. S. (2017). Time-driven activity-based costing for
surgical episodes. JAMA surgery, 152(1), 96-97.
Netten, A., & Beecham, J. (2018). Costing community care: theory and practice. Routledge.
Prahlad, A., Kavuri, S., Madeira, A. D., Lunde, N. R., Bunte, A. G., May, A., & Schwartz, J.
A. (2015). U.S. Patent No. 9,111,220. Washington, DC: U.S. Patent and Trademark
Office.