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.
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.
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.
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).
Woolworths Limited uses the traditional way of conducting the working ways of the company and this may be said to be effective for the company in the years it had been working. This may said to be as per the need of the company as it makes the works of the company an effective one to deal with and take up the pressure to make up the financial costing of the company. Time Driven activity costing may said to be effective for the company as this may improve the working ways of the company in various ways possible. Woolworths costing works are up to the point on the way of which it may need to be considered as the works which may help the company in different ways possible and in this way it would need to be the duty of the company to take care of the works which woolworths does and through which its profit is being maintained. Sometimes, it may the case that the costs that had been applied in the companies are not up to the point on the virtue of which it may become hard for the company to take a look at the costs that had been applied in the company through which all the works which the company are up to the point or not. If the company would apply the following method of costing it will be easier for the company to allocate cost according to the time taken in each activities of the business (Kaplan et al. 2015). Now on this context it can be said that cost allocation form one
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