HI5017 MANAGERIAL ACCOUNTING
Executive Summary
Woolworths working easy are in the traditional ways that had been used by the company over the years and this may need to be changed through using TDABC which may lead the company to work effectively and maintain the things as per the needs. In the following points the effectiveness of using TDABC will be illustrated and the ways it may need to be taken care of as per the needs.
Introduction
Woolworths Limited is one of the largest organization that established that operated mainly in Australia and New Zealand. The organization is associated with retail industry and it considers time driven activity based costing in order to develop its financial statements. The TDABC is somewhat different from traditional costing system and activity based costing. The method is helpful to reduce a number difficulties to create financial statements. The cash flow statement and tax expense can be made more effectively by using it. The report is going to focus on the ways Woolworths can use TDABC and its suitability with the organisation.
Description of Woolworths Limited
Woolworths Limited was established in 1924 and its headquarter is situated in Bella Vista, New South Wales, Australia. It is the second largest organisation in Australia based on its revenue generation after Wesfarmers. It is also the second largest organisation by revenue in the New Zealand. The number of employees associated with this organisation is more 21000. Apart from this, in Australia, Woolworths Limited is the largest liquor retailer, gaming poker machine operator and hotel owner. In the year of 2008, the organisation became the 19th largest retailer in the world. However, the organisation is not associated with the Woolworth brands in the United States or in the United Kingdom. In the financial year of 2016, the organization was experienced a loss of $1.235 billion which is the largest compared to last 20 financial report (“Woolworths Group: Quality Brands and Trusted Retailing”, 2018). The organization has different division related to its products such as supermarket, petrol, liquor, general merchandise, home improvement, hotels and gambling. The Woolworths Limited is owned 75 percent of Australian Leisure & Hospitality Group that operates more than 12650 poker machines throughout Australia and by doing so, the organisation became largest poker machine operator in Australia. Woolworths Limited earns approximately $1.2 billion revenue by operating poker machines. The hotels associated with Woolworths Limited created loyalty card scheme for the customers in order to provide incentives to frequent gamblers and arrange then free food and drinks. In current scenario, the organisation is focused on implementing TDABC in the organisation in order to make the financial statement more efficiently and reduce any drawbacks in it.
Description of TDABC and its features
Time Driven Activity Based Costing or TDABC is the cost accounting system that is considered by many organizations in present scenario. The organization can get different facilities while using this cost accounting system in order to create financial statements and other financial calculations.
The TDABC model is simpler than the traditional model used in calculation of cost accounting by different organisations. The equivalence method is used in this procs that is established in “resource group”, which focuses on the time required to perform the activities. An organisation can create its financial statements by conducting different financial calculation easily and it consumes less time compared to traditional cost accounting system. The TDABC is the strategic model of cost and profitability which is more faster, inexpensive and can be created with more ease (Öker & Adıgüzel, (2016).
Usage of TDABC in an organisation can enable the integration of detailed transactional data. Those information can be available in ERP system and customers relationship management system of an organisation. Those information are essential for an organisation to create its financial statement moreaccourately. Usage of those information are emphasised by using TDABC and an organisation can associate those while calculating for financial statements. The TDABC model is based on transaction of money specific to the orders made by an individual. The model can be used to associate the orders of the customers, suppliers, distributors and other stakeholders in order to make calculation to make financial statements.
An organisation can get different opportunities while using this model for its financial calculations. The efficiencies of the processes associated with the organisation can be measured more efficiently.Apart from this, an organisation can find out the opportunities related to its capacity management by using TDABC efficiently. Those information can be used to create the financial statements more accurately. The TDABC is helpful to gather those information from different sources of the organisation easily that enable the accounting calculation moe structured and effective.
The TDABCishelpful forthe orgnaiations to forecast the demand of the resources for future usage. The correct forecast of the resources can be helpful for the organisation to enhance the level of productivity (McLaughlin et al. 2014). Different resources such as human resource, technological resource, raw materials and more can be forecasted by using this method and an organisation can make its budget according to its demand of the resources for the future usage. Apart from this, the right budget can be helpful for the organisation to estimate the requirements for different activities related to the business operations. The correct forecast is helpful in this process and an organisation can make its budgets effectively by focusing on different small requirements of the business.
The TDABC model can be easily scalable by the organizations and for this reason, this model can be used in different organizations in present scenario. A number of business organisations need to go through complex financial calculations in order to create its financial statement every year. The larger organisation especially which is establishment in different countries , need to conduct a range of financial calculations in every financial years. Those organisations can use this method of financial calculation by using scalable application and database technologies. Using those is helpful for the organization to reduce the complexity related to the financial calculation and a largerorgansiationc an make its financial statements more easily while consider using TDABC model (Akhavan, Ward & Bozic, 2016).
The model is inexpensive easy to updated for this reason, the organisation need to facelesser difficulties in order to work using this model. Apart from this, the cost related to update this method is lower and an organisation does not need to face difficulty for it. The TDABC model is used to deal with complexity related to the customers, segments, processes, products and more. The financial calculations can be done more easily that is helpful for its growth.
The different ways TDABC is different from Activity-Based Costing and traditional costing systems
An TDABC can be said to be different from the other activity based costing and traditional costing system as this may be effective for the company to take care of the works which may be suitable for the company to work and maintain the works of their business in a different manner. Coming to the study, an activity based costing is supposed to be said as the ways through which a company works on an make it effective for the customers to take care of the works and all the cost of the company are due to the activity on the virtue of which it works and maintains its business (Thaker, Frank & Feeley, 2015). On the other hand traditional costing system is the ways through which all the volume of cost drivers is needed to be considered and as the way the item is being produced and in this way it can be said to be as the ways through which it may need to be done as per the needs of the company and this may try to be as per the works through which Woolworths would need to deal with the works effectively. Time Driven Activity based costing is said to be the way through which the ways a company would be working and work on the activities effectively.
Some of the ways through which it may be effective for the company to work are the ways through which a company would need to take care of the activities that are being done in the company and on that way the time is being considered under which it may be effective for the company to make a way into the costing part of the company and then try to work on the format effectively. It may considered to be a simpler way of conducting the costing process as all the costs that a company puts in order to work effectively into the company, TDABC provides an effective time driven ways through which a specific time period is being introduced that helps the company to take care of the works in an effective manner (Kaplan, 2014). Distinguishing between the three costing ways the following ways:
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live in London, and most of the time I travel owing to my work responsibilities. I got to know about them from a friend, and it’s been quite a while that their expert team of writers is supporting me with the college projects. I’m highly satisfied with their services. Keep doing a good job!
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