Review of Professional Management- A Journal of New Delhi Institute of Management

Open Access Open Access  Restricted Access Subscription Access

A Comparative Analysis of Perceived and Actual Benefits from Implementation of Activity Based Costing in Selected Manufacturing Units in India


Affiliations
1 Department of Management studies, Krishna Institute of Engineering and Technology, Ghaziabad, U.P., India
2 School of Management Studies, IGNOU, New Delhi, India
 

The Activity based costing (ABC) technique for apportionment of overhead cost is considered superior over the traditional costing system. There are various perceived benefits before implementing the ABC system in any organization. This study is an attempt to know whether the perceived and actual results are the same or not for implementing the Activity Based Costing System in selected manufacturing units. The study is based on primary data collected through questionnaire. To analyze data, descriptive statistical method is used and to know the difference between the means of perceived benefits and actual benefits, paired sample t-test has been used through SPSS version-22. The study is based on the 52 medium and large scale manufacturing units which have implemented the ABC system. We found no significant difference between perceived scope and benefits and actual scope and benefits derived through ABC system implementation.

Keywords

Activity Based Costing, ABC system, Implementation of ABC, Manufacturing Sector.
User
Notifications
Font Size

  • Ahmadzadeh, T. et al. (2011). Exploration of Factors Influencing on Choice the Activity-Based Costing System in Iranian Organization, International Journal of Business Administration, 2(1), 61-70.

  • Al-Basteki, H., & Ramadan, S. (1998). A survey of Activity-based costing practices in Bahraini manufacturing firms, Economics and Administration, 11(1), 17-29.

  • Almedia, A. & Cunha, J. (2017). The Implementation of Activity-Based Costing (ABC) System in a Manufacturing Company. Manufacturing Engineering Society International Conference 2017, MESIC 2017, 28-30 June 2017, Vigo (Pontevedra), Spain, 932-939.

  • Anand, M., Sahay, B. S. and Saha, S. (2005). Activity-based cost management practices in India: An empirical study. Decision, 32(1), 123-152.

  • James, P. C. (2013). An analysis of the factors costing (ABC) in the financial sector in Jamaica. International Journal of Business and Social Research, 3(7), 8-18.

  • Lu, T. Y., Wang, S. L., Wu, M. F., & Cheng, F. T. (2017). Competitive Price Strategy with Activity-Based Costing–Case Study of Bicycle Part Company. Procedia CIRP, 63, 14-20.

  • Oseifuah, E. K. (2018). Activity based costing (ABC) in the public sector: benefits and challenges. Problems and Perspectives in Management, 12(4) 581-588.

  • Salawu, R. O., & Ayoola, T. J. (2012). Activity based costing adoption among manufacturing companies in Nigeria. Journal of Modern Accounting and Auditing, 8(1), 40-45.

  • Shaban E. A. Salem, Mazhar, S. (2014), The Benefits of the Application of Activity Based Cost System - Field Study on Manufacturing Companies Operating in Allahabad City, India. IOSR Journal of Business and Management, 16(11), 39-45.


Abstract Views: 357

PDF Views: 132




  • A Comparative Analysis of Perceived and Actual Benefits from Implementation of Activity Based Costing in Selected Manufacturing Units in India

Abstract Views: 357  |  PDF Views: 132

Authors

Amit Kumar Arora
Department of Management studies, Krishna Institute of Engineering and Technology, Ghaziabad, U.P., India
M.S.S Raju
School of Management Studies, IGNOU, New Delhi, India

Abstract


The Activity based costing (ABC) technique for apportionment of overhead cost is considered superior over the traditional costing system. There are various perceived benefits before implementing the ABC system in any organization. This study is an attempt to know whether the perceived and actual results are the same or not for implementing the Activity Based Costing System in selected manufacturing units. The study is based on primary data collected through questionnaire. To analyze data, descriptive statistical method is used and to know the difference between the means of perceived benefits and actual benefits, paired sample t-test has been used through SPSS version-22. The study is based on the 52 medium and large scale manufacturing units which have implemented the ABC system. We found no significant difference between perceived scope and benefits and actual scope and benefits derived through ABC system implementation.

Keywords


Activity Based Costing, ABC system, Implementation of ABC, Manufacturing Sector.

References





DOI: https://doi.org/10.20968/rpm%2F2018%2Fvl6%2Fi2%2F130551