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Activity Based Costing and Product Pricing Decision: the Nigerian Case

Author

Listed:
  • Ebipanipre Gabriel Mieseigha

    (Nnamdi Azikiwe University)

Abstract

This paper examined activity based costing and product pricing decisions in Nigeria so as to ascertain whether activity based costing have the ability to enhance profitability and control cost of manufacturing firms. Towards this end, a multiple correlation and regression estimation technique was used in analyzing the data obtained in the study. The study found that activity based costing affects product costing and pricing decision. In addition, the results showed that improved profitability and cost control can be achieved by implementing activity based costing approach by manufacturing firms. The implication is that traditional costing approach fails in many pricing situations by arbitrarily allocating indirect cost and activity based costing helps in allocating indirect cost accurately. Thus, it was recommended amongst others that activity based costing need to be practiced, maintained and implemented by manufacturing firms since it has a broad range of uses for a wide variety of company functions and operations in the area of process analysis, strategy support, time-based accounting, monitoring wastage, as well as quality and productivity management.

Suggested Citation

  • Ebipanipre Gabriel Mieseigha, 2014. "Activity Based Costing and Product Pricing Decision: the Nigerian Case," Acta Universitatis Danubius. OEconomica, Danubius University of Galati, issue 10(3), pages 73-81, June.
    • Handle: RePEc:dug:actaec:y:2014:i:3:p:73-81
    as

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    File URL: http://journals.univ-danubius.ro/index.php/oeconomica/article/view/2374/2128
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    References listed on IDEAS

    as
    1. Trond Bjørnenak & Falconer Mitchell, 2002. "The development of activity-based costing journal literature, 1987-2000," European Accounting Review, Taylor & Francis Journals, vol. 11(3), pages 481-508.
    2. Davood Askarany & John A. Brierley & Hassan Yazdifar, 2012. "The effect of innovation characteristics on activity-based costing adoption," International Journal of Managerial and Financial Accounting, Inderscience Enterprises Ltd, vol. 4(3), pages 291-313.
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