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Identify a product/service that use Activity Based Costing

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Identify a product or service in your organization that could use ABC (Activity Based Costing). Then identify at least two activities for ABC and the appropriate cost drivers for those activities. Estimate the application rates for each cost driver.

If you cannot identify specific actual amounts, make a reasonable estimate and apply the tool as if the data were factual.

Your report should include

The name and nature of the organization
The activity and time period you used
The inputs you used
Your results
Any implications from your results
This should be a one to two page report.

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Solution Summary

For the purpose of Activity Based Costing analysis we have selected Wal-Mart as organization. Wal-Mart was founded in 1962 and currently has more than 8,000 retail units in 15 different countries. The company has a employee base of more than 2.1 million worldwide. Wal-Mart is not only one of the largest private employers in the U.S., but the largest in Mexico and one of the largest in Canada as well. Wal-Mart is the world's largest retailer with total sales of more than $400 billion for the year ending January 2009.
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For the purpose of Activity Based Costing analysis we have selected Wal-Mart as organization. Wal-Mart was founded in 1962 and currently has more than 8,000 retail units in 15 different countries. The company has a employee base of more than 2.1 million worldwide. Wal-Mart is not only one of the largest private employers in the U.S., but the largest in Mexico and one of the largest in Canada as well. Wal-Mart is the world's largest retailer with total sales of more than $400 billion for the year ending January 2009.
For the purpose of activity base costing analysis we have considered the annual report of the company for the year ended January 31, 2009. ...

Solution provided by:
Sonia Agarwal, CA
Education
  • Chartered Accountant (Equivalent to CPA in US), Institute of Charted Accountants of India
  • Bachelor of Commerce, West Bengal University
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