IDEAS home Printed from https://ideas.repec.org/a/scm/usvaep/v12y2012i1(15)p170-182.html
   My bibliography  Save this article

Application Of Activity Based Costing In Manufacturing Companies In Bangladesh: A Survey Based Study

Author

Listed:
  • Nikhil Chandra SHIL

    (Department of Accounting Faculty of Business Administration American International University - Bangladesh)

  • Alok Kumar PRAMANIK

    (Head, Department of Commerce Bhatter College, Paschim Medinipur West Bengal, India)

Abstract

The widespread environmental change has forced many organizations to change and re-think their business and competitive strategies, particularly cost management system, in order to achieve the competitive edge in the marketplace. Successful organizations are those that are able to improve quality, lower costs and efficiency of operations and eliminate products and services that incur losses. This explains why some organizations are successful while others fail. An organization costing system is a system that helps the management with the strategy planning while the system plays an important role in providing accurate cost information about the products and customers. In other words, the costing management system is important to provide timely and quality information to help managers in their decision making process. To achieve this, many organizations shift their focus from conventional or traditional costing system to an increasingly popular cost methodology system that is Activity- Based Costing (ABC). This system identifies cost pool or activity centers in an organization. It simply collects cost in functional activity cost pools and then applies costs to products/services using individual cost drivers (Brignall, 1997). It assigns cost to products and services (cost drivers), based on the number of events or transactions that are taking place in the process of providing a product or service. From the very beginning, when this system was introduced, it has already proved its popularity among the manufacturing context. A satisfactory number of research and studies reveal how the ABC system in the manufacturing sectors has effectively kept the operational cost at marginal level and still be able to provide better customer service at the same time. Thus, this study analyses how an ABC costing system that improves operations and to better meet the needs of customers in a more cost – effective manner. In Bangladesh, the research on application of is very rare that made the researchers interested to conduct a research in this area. It will enlarge the scope of further research benefiting the practitioners to come up with strong solutions to the problems identified in the research. A semi-structured questionnaire is designed to conduct the field survey. And descriptive statistics are used to present the survey findings. As the research is a preliminary one, the discussions are kept simple and the analysis is simplified just to highlight the practices in some selective areas.

Suggested Citation

  • Nikhil Chandra SHIL & Alok Kumar PRAMANIK, 2012. "Application Of Activity Based Costing In Manufacturing Companies In Bangladesh: A Survey Based Study," The USV Annals of Economics and Public Administration, Stefan cel Mare University of Suceava, Romania, Faculty of Economics and Public Administration, vol. 12(1(15)), pages 170-182, June.
  • Handle: RePEc:scm:usvaep:v:12:y:2012:i:1(15):p:170-182
    as

    Download full text from publisher

    File URL: http://www.seap.usv.ro/annals/arhiva/USVAEPA_VOL.12,ISSUE_1(15),2012
    Download Restriction: no

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:scm:usvaep:v:12:y:2012:i:1(15):p:170-182. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Liviu Scutariu). General contact details of provider: http://edirc.repec.org/data/feusvro.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.