Applicability of activity-based costing in the Jordanian hospitality industry

Abstract

The study aims to investigate the level of activity-based costing (ABC) system adoption as a management accounting tool in the Jordanian hospitality industry, Aqaba. An empirical survey via questionnaire was conducted for 19 of the three, four and five stars hotels in Aqaba and the descriptive statistics were used to identify the level of ABC system adoption. The study found the adoption level to be very satisfactory. Overall, Aqaba hotels uses a modern management accounting techniques, such as (budgeting practices, profitability measures, product and customer profitability analysis), but they lack the detailed cost information system because ABC is widely adopted to provide such benefits, therefore, Aqaba hotels are placing greater emphasis on those techniques like the ABC system. The study provides a unique detailed examination of the management accounting practices by using the ABC system and also provides a strong indication for the unique future researches in this industry.