Toothpaste and Colgate- Palmolive

Good Essays
1.0 Introduction
Colgate- Palmolive is one of the leading consumer product organizations that have been dealing its products in worldwide. Colgate- Palmolive is an America based company and has many branches all over the world. One of the branches is located in Malaysia. Colgate- Palmolive (M) Sdn Bhd focusing their product segment on toothpaste and toothbrush. Both products are very competitive presently in Malaysia market. At the present, Colgate is implementing Activity-Based Costing (ABC) method. ABC is a system had been practices in many organizations for being a tool to measures the cost and performance of the activities and the cost objects. Hence, the management should look into ABC system which uses to provide more accurate information for decision making in determining costs by cost object such as product, customer, and location and the cost pool of the company.

2.0 Keys Areas for Improvement

According to Reuben Mark (2003), Colgate Palmolive has highlighted its strategy of developing and launching innovative new products globally continues to strengthen the company’s market leadership positions around the world. Hence, it does apply to Colgate Palmolive Malaysia. Indeed the implementation of activity based costing by Colgate Palmolive (M) provide information for achieving its plans since the ABC is costing technology that traces cost to products according to activities perform on them. Accurate cost information is produced as to such purposes; focusing company strategy, designing products to increase customer value, and continuously improving activities on the operation throughout the company (Peter, 1989). In general, the ABC system cover such following area of activities including product design and processes, storage of raw materials, set up of machinery to ensure a smooth flow in the production line, machine operating time as well as cleaning of machine after each production.

Product design is crucially for Colgate Palmolive (M) to

You May Also Find These Documents Helpful

  • Powerful Essays

    Activity Based Costing Method (ABC). ABC determines and allocates cost by activities a company executes. This generally happens in four steps: identify each activity and its associated costs, both total and indirect; estimated cost driver and quantity; allocation computation; and cost allocation to the respective activity. ABC refines the way indirect costs are allocated to production and focuses on the costs of each individual activity. Costs are also further assigned to each product within the activities and each activity has its own cost driver. Because of the specificity, active based costing provides a…

    • 1900 Words
    • 7 Pages
    Powerful Essays
  • Good Essays

    Case 5A

    • 1200 Words
    • 5 Pages

    Glaser Health Products of Ranier Falls, Georgia needs assistance in evaluating and classifying costs in order to implement an activity-based costing system. As stated in the case, these costs will be used for planning and control decisions rather than inventory valuation. The activity-based costing system will provide better allocation of Glaser’s overhead costs rather than a system to look at the cost drivers or the activities that their overhead costs comprise. Glaser’s general structure of an activity-based costing model should consist of cost objects, activities, consumption of resources, and cost.…

    • 1200 Words
    • 5 Pages
    Good Essays
  • Satisfactory Essays

    Activity Based Costing is a costing tool that corporations use to identify costs that are associated with the production of an item. CarryAll Company produces specialtyand standard briefcases. This company has not adopted ABC. Therefore, by not using ABC, the president believes that the producing specialty briefcases are both beneficial for the company and the president, but this is not true. Without using ABC, CarryAll only applies direct and indirect costs. The president was concerned with standard cases showing a loss while specialty was showing a profit. The company will see an overall higher profit by using ABC by $.25. (18250-18225)…

    • 303 Words
    • 2 Pages
    Satisfactory Essays
  • Better Essays

    Glaser Health Products manufactures medical items for the health care industry. Production involves machining, assembly and painting. Finished units are then packed and shipped. The financial controller is interested to introduce an activity-based costing (ABC) system to allocate (or distribute) indirect costs to products. Indirect costs, as distinct from direct costs, cannot be unambiguously linked to specific products. The controller would like to calculate product costs based on ABC for planning and control, not inventory valuation.…

    • 1998 Words
    • 9 Pages
    Better Essays
  • Good Essays

    BUSI 601 DB 1 response

    • 530 Words
    • 2 Pages

    Discussion Board One asks the student to select a recognized company and a Contemporary Management Technique from Cost management: A Strategic Emphasis by Blocher, Stout, Juras, and Cokins (2013). The student is instructed to draw a parallel between the chosen company and technique, and elaborately describe how the technique would effectively aid in maximizing the company’s success. To complete this assignment, Johnathan Bradley describes the Ford Motor Company and activity-based costing. He describes the Ford Motor Company as a dominant company within the automotive manufacturing industry, and uses research performed by Eggers and Bangert (1998) to define activity-based costing as a tool that measures costs based on segmented activities. Jonathan effectively uses the study to capture the advantages of activity-based costing, and gainfully applies these findings to Ford Motor Company. He illustrates how the use of activity-based costing would support the company’s critical success factors by increasing quality levels and improving cycle time. Additionally, Jonathan explains how the utilization of this Contemporary Management Technique would aid Ford Motor Company in effectively dividing costs based on activity, which would allow the company to ensure maximum efficiency throughout all activities.…

    • 530 Words
    • 2 Pages
    Good Essays
  • Powerful Essays

    Activity based costing (ABC) is an accounting method that identifies the activities a firm performs creating the real cause of the overhead, and then assigns the indirect costs of those activity only to the products that are actually demanding the activities. An activity based costing (ABC) system recognizes the relationship between costs, activities and products, and through this relationship assigns indirect costs to products less arbitrarily than traditional methods.…

    • 2327 Words
    • 9 Pages
    Powerful Essays
  • Better Essays

    Cost Method Paper

    • 1000 Words
    • 4 Pages

    The management of Super Bakery thought it was necessary to implement the activities of the ABC cost method. The concept of the method is to produce a costing system that a company allocates factory overhead costs to activity center (e.g. bakery machine set ups, operating machines) and then uses activity cost drivers to allocate factory overhead costs to individual products or services. Http://simplestudies.com/activity-based-costing_(abc).html…

    • 1000 Words
    • 4 Pages
    Better Essays
  • Good Essays

    Activity Based Costing

    • 2757 Words
    • 12 Pages

    Activity based costing is a strategy used by managers to determine where to spend money. This contrasts the traditional costing system (Marx, 2009). Activity based costing provides a lot more benefits for the company and displays a more clear look at how the company is doing economically (Cooper, 1991). It allows managers to see where to spend money, and on which resources to focus their spending (Cooper, 1991). Managers should cut back spending on resources, and at the same time increase the output of their products (Cooper, 1991). There are several benefits to using the activity based costing method, and that is why it is growing in popularity. Though, in order for managers to optimize the benefits that activity based costing can provide, they will need to fully understand how it works. Activity based costing in most basic terms is spending money on specific recourses depending on the activity they serve the company economically (Cooper, 1991). This is in contrast to the standard per-unit costs. A per-unit cost is not a beneficial to know, appose to knowing how much money a specific production line would bring in per year (Cooper, 1991). Knowing how much each section brings in will allow the managers to know how…

    • 2757 Words
    • 12 Pages
    Good Essays
  • Powerful Essays

    Activity based costing (ABC) assigns manufacturing overhead costs to products in a more logical manner than the traditional approach of simply allocating costs on the basis of machine hours. Activity based costing first assigns costs to the activities that are the real cause of the overhead. It then assigns the cost of those activities only to the products that are actually demanding the activities.…

    • 1474 Words
    • 6 Pages
    Powerful Essays
  • Powerful Essays

    The present report will investigate the costs structure of two products of Coffee Bean Inc., Moana Loa and Malaysian. Initially, the so far applied traditional method will be presented. Then, the refined costing system of Activity Based Costing will be examined. Following there will be a comparison of the two methods with an effort to locate points that will reveal inconsistencies in costing and subsequent…

    • 3368 Words
    • 14 Pages
    Powerful Essays
  • Good Essays

    toothpaste

    • 463 Words
    • 2 Pages

    Toothpaste has a history that stretches back nearly 4,000 years. Until the mid-nineteenth century, abrasives used to clean teeth did not resemble modern toothpastes. People were primarily concerned with cleaning stains from their teeth and used harsh, sometimes toxic ingredients to meet that goal. Ancient Egyptians used a mixture of green lead, verdigris (the green crust that forms on certain metals like copper or brass when exposed to salt water or air), and incense. Ground fish bones were used by the early Chinese.…

    • 463 Words
    • 2 Pages
    Good Essays
  • Satisfactory Essays

    chap 3 quiz 2

    • 511 Words
    • 5 Pages

    Aujla Corporation uses activity-based costing to determine product costs for external financial reports. The company has provided the following data concerning its activity-based costing system:…

    • 511 Words
    • 5 Pages
    Satisfactory Essays
  • Good Essays

    First of objectives is to understand the basic concepts of activity-based costing (ABC). From the literatures and the implementation experiences in these three cases, the basic concepts of activity-based costing (ABC) have been identified. Activity-based costing (ABC) was mainly applied as a superior method for allocating overhead costs. According to the case of Tripoli Libya, it mentioned activity-based costing (ABC) has received its name because of the focus on the activities performed in the realization of a product. Costs are traced from activities to products, based on each product's consumption of such activities. Because of the assumption that a product uses activities and the allowance for batch and product level cost-drivers, it is generally agreed that activity-based costing (ABC) systems are superior in modeling and tracking costs…

    • 836 Words
    • 4 Pages
    Good Essays
  • Powerful Essays

    Managerial Accounting Case

    • 6132 Words
    • 25 Pages

    References: Ali, M.F. (2003). Activity Based Costing/Management in Service Industry. Retrieved June 9, 2008, from http://www.aimamc.com/staci/articles/abcm.htm…

    • 6132 Words
    • 25 Pages
    Powerful Essays
  • Good Essays

    The idea for this example is to further explain Activity Based Costing and how it can help the Ideal Manufacturing Company keep its costs at the correct level. Activity based costing is defined as “An activity based costing (ABC) system recognizes the relationship between costs, activities and products, and through this relationship assigns indirect costs to products less arbitrarily than traditional methods..” (Investopedia, 2014)…

    • 578 Words
    • 2 Pages
    Good Essays

Related Topics