Feasibility of Costing Model Variants:An Investigation of Small Scale Industry

Activity-based costing as a technique has proved an innovative practice in the area of management accounting. ABC has facilitated companies to classify the true costs of not only product and services but also processes. This empowered management to make sound decisions related to profitability and the effectiveness of their production process. Many scholars have proved the advantage of activity-based costing over traditional costing system; this paper explores the benefits of ABC to the Small & Medium Enterprises (SMEs) population. Also, the challenges faced by SMEs. The paper demonstrates the framework for ABC implementation with the support of real-time case of an Indian SME.