Abstract
Article history: Received October 28, 2014 Received in revised format 15 January 2015 Accepted 28 January 2015 Available online January 31 2015 An opportunity to investigate the technical and organizational effect of management accounting system changes has appeared with companies' adoption of activity-based costing (ABC). This paper presents an empirical investigation to study the effects of ABC system for case study from food industry in Iran. From this case, the paper develops a framework for assessing ABC implementation and hypotheses about factors that influence implementation. The study detects five cost centers and for each cost center, it determines different cost drivers. The results of our survey has detected that implementation of ABC system not only helps precise allocation of overhead costs but also helps internal management companies for better planning and control of production, making better decisions for company's profits. Growing Science Ltd. All rights reserved. 5 © 201
Highlights
During the past few years, there have been tremendous efforts on using activity-based cost (ABC) method for better allocation of cost components and making strategic decisions (Anderson, 2002; Tsai et al, 2014). Langmaak et al (2013), for instance, presented a generic factory cost model that could estimate different costs at multiple levels of any manufacturing plant. Jing and Songqing (2011) analyzed the importance of implementing ABC to the environmental costs based on the traditional techniques of environmental cost allocation, concentrating on introducing how environmental costs account by ABC, provided useful information for decision-making use
This paper presents an empirical investigation to study the effects of ABC system for case study from food industry in Iran
We have presented an empirical investigation to study the effects of changing cost accounting system from traditional method to activity based cost method in one of food makers in Iran
Summary
During the past few years, there have been tremendous efforts on using activity-based cost (ABC) method for better allocation of cost components and making strategic decisions (Anderson, 2002; Tsai et al, 2014). Langmaak et al (2013), for instance, presented a generic factory cost model that could estimate different costs at multiple levels of any manufacturing plant. Jing and Songqing (2011) analyzed the importance of implementing ABC to the environmental costs based on the traditional techniques of environmental cost allocation, concentrating on introducing how environmental costs account by ABC, provided useful information for decision-making use. Qian and Ben-Arieh (2008) presented a cost-estimation model that links ABC with parametric cost representations of the design and development phases of machined rotational components It presented several parametric techniques applicable at design time by using parts’ feature geometry. Tsai et al (2012) proposed an integrated concept, ABC system, to solve the problem of environmental and cost evaluation They included a case study of an existing pulp and paper firm in Taiwan to demonstrate that the ABC method could estimate emissions of waste and the environmental expenses of a final product more precisely than traditional methods do. The results of the study implied that ABC technique and process modeling could provide a good starting point in heading toward more cost-conscious design This way the designers could learn the relationships between the activities executed in the firm and their associated expenses. The development of a parametric cost estimation model based on ABC and process modeling provided a challenge for future study
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