Woolworth: Company Background, Cost Information Analysis, And Activity Based Responsibility Accounting

Introduction to Woolworth and its Products

Woolworth is large scale supermarket based in Australia operated in a retail sector by offering variety of goods to seal the attention of its most of the users. This grocery chain has founded by Woolworth Limited in 1924 in Bella Vista New South Wales. The grocery stores have 992 stores located all across the world to capture the whole world. Various products available in the grocery stores Woolworth Ltd include Vegetables, fruits, poultry products and packaged products (Woolworth, 2017). Customers like to visit this place as the current saves the time of the client by purchasing all the stuff available under same roof. Other than grocery items other stuff available at this store includes entertainment items, magazines, health and wellness products, household products, pet and baby products and stationery items. Due to the variety of ranges of products available in the store of an entity helps in targeting different age group people such as infant, teenager, adult and old age people. A person can purchase the products from this store by visiting the retail store as well as purchasing from the online store (Durojaiye, Bell Gorrod, Andrews, Ntziora, and Cartwright, 2017). Through E- commerce website of the firm a customer can purchase the goods from anywhere and anytime according to its availability.

Initial name of this store in 1924 was Wall worth bazaar Ltd which further changed to Woolworth Ltd Supermarket that includes all the goods available in this market to meet the desired needs of all the users (Winkler, 2017). Fresh and food people campaign has organised by the firm o deliver quality oriented services to its variety of users by emphasizes on the freshness of the products as health of the customers gets affected by eating fresh or stale food. Slogan of the supermarket was Australian fresh food people that catch the attention of most of the users towards this store as everyone wants to visits the store to explore different varieties of stuff available in the same roof.

Cost is regarded as one of the important factor for an entity that helps in achieving desired aims and targets of an entity in a given span of time (Conen, Matter-Walstra, Schädelin, Mariani and Hess, 2017). The information of cost can be generated from the financial statements of the business concern as ascertaining costs is regarded as the most important procedure in ensuring the longer survival of the firm by beating all its competitors in the external business environment (Webb and et. al., 2017).  Important role played by a cost accountant is to ascertain all kinds of cost incurred in an entity as determining all kinds of costs is suitable for the firm. Analyzing the risks at the initial stage is beneficial for the firm like Woolworth in managing all the risks by increasing different sources of income generated by the firm.

Cost Information Analysis Methods Used by Woolworth

Using different methods mentioned above, costs are ascertained by an entity by evaluating the financial performance of an entity (Wong and et. al., 2017). Different kinds of costs are evaluated by the Woolworth Ltd to ensure its survival in the external business environment. Cost accountants will perform costs benefit analysis to determine the position f the firm in the external environment as external market competition get eliminated by the business by utilizing all its strengths and power.

Activity based responsibility accounting emphasises on ascertaining the financial performances of an entity by keeping track of all the revenues and expenditures incurred in an enterprise. Cost, revenues and profits are three important measures to test the financial performance of an entity for a particular span of time. Three pillars of the responsibility accounting include controllability, information vs. blame and motivation desired behaviour. As a part of responsibility accounting, segmented reporting used by the managers in collecting data regarding cost, revenue and profit to strengthen the financial performance of the business concern.

Balance score card is an important tool used by an enterprise in evaluating the performance of the firm by stressing on various aspects. This approach helps in analyzing the performance of the business overall particular span of time as providing quality oriented services to the customers is important for the business. It helps in analyzing financial as well as non-financial performance of the firm in the external business environment. Financial measures used by the firm to compare the current performance with the past results generated by the firm in an enterprise. This technique focuses on identifying errors in financial as well as non-monetary areas as these areas play an integral role in the success of the business within a particular span of time. An entity uses balance scorecard to identify all the unique traits and skills of the business concern to ensure longer survival of the enterprise. Future of the firm depends on the accomplishment of various goals and the objectives within a shorter span of time. Two important indicators used in this approach helps in achieving the desired market aims and targets within a shorter span of time. Cost minimised by the fir to enhance the quality of the services delivered by the entity in lesser time. Cost, quality and time are the three pillars used as weapon against the competitors of the business in capturing higher market share in the external entity.

Activity-Based Responsibility Accounting and Segmented Reporting

Lead and lag indicators used as important tool in creating the balance scorecard by considering all positive and negative aspects in increasing the productivity of the firm against all its rivals operated in the similar industry.

Figure 1 Balanced Scorecard

Balanced Scorecard is compared with the vision of the business which will be achieved in the uncertain future with the help of various missions. These four missions act as a staircase to reach the final destination of the firm are Financial, Internal operations, Learning and growth and Customers.

A cost is negative factor incurred in an entity which needs to be avoiding by applying various cost reduction strategies (Web and et. al., 2017). Aim of the business while applying cost reduction strategy is to reduce overall operational costs in an entity by increasing the productivity of the firm. There are various cost reductions strategies that Woolworth may follow is mention below:

• Business process improvement
• Safety performance
• Quality management technique
• Six sigma

Activity based costing is an approach used by an entity in allocating al the cost incurred  in a business on a different kinds of activities takes places in an entity. Resources available I the firm is assign to all the departments on the basis of overhead rates.

Sales budget

Wool worth Ltd can use performance budgeting in keeping record of all the transactions takes places in an entity. This budget helps an entity in forecasting future performance of the business by utilizing current facts and figures. Motive of this budgeting is to manage the financial resources held in an entity for long term purpose by considering all the important criteria’s (Mullie, Schwartzman, Zwerling and N’Diaye, 2017). Performance budgeting helps in building relationships between funding level and expected outcomes generated by the business concern. Current budgeting approach has categorized into two categories such as private entity and public entity. Performance budgeting is based on three different elements such as final outcome, strategy and activity. Goals and the objectives crafted by the firm used as various criteria’s in improving the performance of the firm in achieving all the desired final outcomes within a given span of time (Azizoddin and et.al., 2017). Performance budgeting is suitable for private entities as quality of the services delivered by an entity depends on the overall performance of an entity. Positive as well as negative performance of the firm. Performance budgeting is based on financial as well as non-financial metric such as activity based costing in which various costs incurred in an entity in segregating all the costs among various departments takes places in an entity. Planning and controlling measures used by the firm to keep track on all the expenses incurred in an entity.

Conclusion

It can be summarized from the above study that Sales budget and expense budget comes under forecast budgeting in predicting the performance of the firm. Performance budgeting is used by the business concern in monitoring the performance of an entity by considering all the factors of an entity. Current report targets positive aspects of the business concern by spotting all kinds of costs incurred in a firm to eliminate same by following various tools and techniques.

References

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Conen, K.L., Matter-Walstra, K., Schädelin, S., Mariani, L. and Hess, V., 2017. Benefits and costs of bevacizumab in recurrent glioblastoma: A quality adjusted survival and cost analysis (EVALUATE).

Durojaiye, O. C., Bell Gorrod, H., Andrews, D., Ntziora, F. and Cartwright, K., 2017. Clinical efficacy, cost-analysis and patient acceptability of outpatient parenteral antibiotic therapy (OPAT): a decade of Sheffield (UK) OPAT service. International Journal of Antimicrobial Agents.

Mullie, G. A., Schwartzman, K., Zwerling, A. and N’Diaye, D. S., 2017. Revisiting annual screening for latent tuberculosis infection in healthcare workers: a cost-effectiveness analysis. BMC medicine. 15(1). p.104.

Webb, M and et.al., 2017. Cost effectiveness of a government supported policy strategy to decrease sodium intake: global analysis across 183 nations. Bmj. 356. p.i6699.

Winkler, J. K., 2017. Five and Ten: The Fabulous Life of FW Woolworth. Pickle Partners Publishing.

Wong, C. K. H., and et.al., 2017. Traditional growing rod versus magnetically controlled growing rod for treatment of early onset scoliosis: Cost analysis from implantation till skeletal maturity.Journal of Orthopaedic Surgery. 25(2). p.2309499017705022.

Woolworth, D. S., 2017. Sound systems in reverberant spaces: Approaches in practice. The Journal of the Acoustical Society of America. 141(5). pp.3996-3996.

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