Activity-based Cost Management Research Articles

Mungkinkah untuk menerapkan Activity Based Costing/Management pada Organisasi Pemerintah? Sebuah Tinjauan Pustaka

As one of the management tools in private sector organizations, Activity Based Costing/Management (ABC/M) provides information and knowledge to make decisions. This study aims to propose an idea of the possibility of implementing ABC/M in government organizations. The research was conducted using a Systematic Literature Review approach. The author collects various articles from reputable journals and proceedings using the Google Scholar database. The selection of articles was adjusted to predetermined inclusion and exclusion criteria. A total of 30 selected articles were analyzed and synthesized. The findings show that the ABC/M system is very likely to be applied to government sector organizations. Reflecting on the successful implementation of the ABC/M method in the public sector, the authors found that the implementation process was not easy. This is supported by the findings of various challenges and obstacles faced by public sector organizations. This research contributes to convincing policy makers that the ABC/M method can be implemented and theoretically contributes to enriching the ABC/M theoretical literature in the public sector, especially in the government sector.
 Keywords : Activity-Based Costing (ABC); Activity-Based Management (ABM); Government Organizations

Examining the Evolution of Management Accounting: A Qualitative Review

This qualitative review investigates the evolution of management accounting, focusing on its historical development, theoretical frameworks, and contemporary practices. The research aims to provide insights into the adaptive nature of management accounting in response to changing organizational needs, technological advancements, and societal trends. The methodology involves a comprehensive literature review encompassing historical analysis, theoretical perspectives, and empirical studies in the field of management accounting. Key findings reveal the historical roots of management accounting tracing back to the Industrial Revolution, with significant milestones including the emergence of cost accounting techniques, budgeting systems, and advanced methodologies like activity-based costing and strategic management accounting. The review also identifies theoretical frameworks such as agency theory, contingency theory, and institutional theory, offering diverse perspectives on the role and functioning of management accounting within organizations. Contemporary practices in management accounting emphasize strategic analysis, risk management, performance measurement, and the integration of financial and non-financial metrics. Technological advancements, particularly in information technology, have revolutionized decision support capabilities, enabling real-time monitoring and analysis of organizational performance. The synthesis of literature underscores the dynamic and multifaceted nature of management accounting, highlighting its pivotal role in facilitating strategic decision-making, enhancing organizational performance, and driving sustainable growth. The findings contribute to a deeper understanding of management accounting evolution and offer implications for practice and future research.

A centralised cost management system: exploiting EVM and ABC within IPD

PurposeIntegrated project delivery (IPD) is highly recommended to be utilised with building information management (BIM), specifically with BIM level-3 implementation process. Extant literature highlights the financial management challenges facing the proposed integration. These challenges are mainly related to the IPD compensation and the conventional cost control approaches that are not consistent with IPD principles. As such, this paper presents an integration of several methods to support automating risk/reward sharing amongst project parties thus enhancing IPD core team members’ relationship.Design/methodology/approachThe literature review was used to highlight the challenges that face the IPD-based cost management practices such as the risk sharing/reward sharing amongst IPD core team members and potential methods to bridge the revealed IPD gap. A framework was developed by integrating the activity-based costing (ABC) – as a method to analyse the cost structure – and earned value management (EVM) to develop mathematical models that can determine the three main IPD financial transactions (i.e. …) fairly. To demonstrate the applicability of the developed system, a real-life case study was used, in which, promising results were collected in regard to visualising the cost control data and understanding of the accumulative status of the project cost and schedule for team members.FindingsA centralised cost management system (CCMS) for IPD is developed to enable the IPD cost structure as well as automating the risk-sharing/reward-sharing calculations. This system is linked with a web-based management system to display the output of proposed risk-sharing/reward-sharing models. Moreover, a novel grid is developed to show the project status graphically and to respect the diversity in core team members backgrounds. In addition, the case study showed that the proposed integration of different methods (ABC, EVM, BIM and web-based management system) is interoperable and applicable.Originality/valueThis research presents a comprehensive solution to the most revealed challenges in cost management practices in IPD implementation. The outcome of this research contributes to the body of knowledge through presenting new extensions of the EVM to be used with the IPD approach to calculate risk/reward. Moreover, the implementation of the proposed tools such as centralised cost management system (CCMS) and CCMS for IPD web system will enhance/foster the implementation of the IPD in conjunction with BIM process.

Analysis of balanced scorecard usage by private companies

PurposeThe purpose of this paper is to examine the factors related to the use of the balanced scorecard (BSC) by private companies. Specifically, the authors examine how foreign ownership, focus on a global market beyond the local company’s geographic region and other sophisticated management accounting practices (MAPs) (activity-based costing, just-in-time and total quality management) are related to the use of the BSC.Design/methodology/approachThe paper takes a contingency theoretic perspective. The data in this study is based on responses to a survey questionnaire that was mailed to 300 non-listed private companies in Singapore. A total of 135 responses were received, but 23 were incomplete, and thus, rendered unusable. Therefore, the final sample for the study is 112 private companies yielding a 37.3 per cent response rate that is considered high for survey research.FindingsThe authors find significant associations between the use of BSC and foreign ownership, focus on a global market and other sophisticated MAPs. The authors find that foreign ownership and a global market focus are significantly and consistently related to the extent to which the BSC is used across seven different management control purposes. The authors also find some evidence of associations between other sophisticated MAPs and the extent to which the BSC is used for management control purposes.Practical implicationsPrivate companies can use the BSC to better manage risks and use it for purposes such as communicating strategy and objectives, setting targets, evaluating performance, rewarding employees and managers, motivating employees and managers, controlling performance and coordinating across activities, departments and/or functional areas. The study has limitations such as the model is limited and excludes the effects of other significant contingency factors such as organisational culture. It may be appropriate to interview organisational participants to learn more about how their national and organisational culture affects the decision to use the BSC.Originality/valueThe findings fill a critical void in the literature by providing new evidence on the determinants of the use of the BSC by private companies.

Availability of the Fundamental Factors for Adoption of Activity-Based Costing / Management (ABC/M) at Saudi Universities

Availability of the Fundamental Factors for Adoption of Activity-Based Costing / Management (ABC/M) at Saudi Universities

Adopting an Activity-Based Cost Management Model at A Community College: A Case Study

ABSTRACT This paper discusses the key findings from a qualitative case study examining the implementation of an activity-based cost management model (ABC model) at a large community college. In a climate of fiscal uncertainty, the college adopted this model with the goal of improving budgetary decision-making. The paper examines faculty and administrators’ perceptions about the model, specifically surrounding the model’s potential to improve institutional functioning. We also examine stakeholder perceptions of potential barriers to successful campus-wide implementation, as well as its potential impact on the college’s culture surrounding cost management. Findings indicate that key stakeholders believe the ABC model has potential to increase efficiency by providing more holistic cost allocation data that better capture granular organizational cost drivers. However, stakeholders also believe that full implementation will hinge on a common, campus-wide understanding of the model’s benefits, as well as campus-wide shift in cost management culture.

Activity Cost Management and its Effect on Enterprise Productivity

This study investigated the relationship between activity cost management and its effect on enterprise productivity using the exploratory research design. It focused on critical factors that lead to cost-effectiveness. A sample of 113 respondents participated in the study, and data collected from secondary and primary sources were analyzed through descriptive and regression statistical techniques. The result showed that activity cost management has significant positive effect on enterprise productivity. The new result is important because an enterprise is effective when it attains its goals, but productive only when such goals are achieved efficiently. Through the exploration and result, the study clearly highlighted that factors such as activity-based cost management, cost-benefit-analysis, internal control, ratio analysis, zero-base budgeting, internal accountability, and transparency, as well as cost leadership form the basis for enterprise productivity. An effective board of directors is imperative in any enterprise to provide necessary cost leadership for cost-effectiveness and enterprise productivity. The study was limited by insufficient current academic literature, therefore, further study could examine the relationship between activity cost management and enterprise failure. Based on the result, it was recommended that activity cost management practices must be intensified in public enterprises as a measure to reduce the heap of fraud prevalent in such enterprises.

The Strategic Framework of Cost Management for Production Competitiveness: World Experience

Purpose of the article is to analyze the concept of production competitiveness and develop framework of cost management. A variety of cost management techniques requires the identification of their relationship with the requirements of operations management. Identified seven key concepts of operations management, analyzed their essence, information requirements. Systematized cost management techniques accordance with modern concepts of operations management such as: standart-costing, break-even analysis, direct-costing, life-cycle costing, target costing, value analysis, functional analysis, activity-based costing, sensitivity analysis, JIT-costing, kaizen costing, activity-based cost management, value-chain analysis. The aim of the article is the establishment relevance of costing methods with the key concepts of operations management companies.

Assessment of Methods Used to Import External Brought-In Image Data Using Activity-Based Costing/Activity-Based Management

Background: With filmless operation becoming widespread in Japanese hospitals, medical images provided for referral purposes are frequently stored using portable media such as compact discs. Few facilities import brought-in data into their own Picture Archiving and Communication Systems (PACS) with a clearly defined responsible creator at the time of data storage. Currently, no literature analyzing this series of tasks exists. Objective: This study aimed to determine the best workflow for importing brought-in images into PACS in order to optimize management and costs. Methods: We created three different importation operational workflows (post-medical examination importation, pre-medical examination importation, and pre-medical examination importation using Temporary PACS for storage), and clarified the decision maker, who decides when to lock and prevent further image modifications, and the responsible creator of the image. Task analysis of each operation was carried out using Activity-Based Costing and Activity-Based Management, methodologies used in the field of management accounting. Results: Task analyses revealed that post-examination importation increased the burden on physicians, in addition to increasing operational costs. It was also shown that an explicit responsible creator did not exist with pre-examination importation. When pre-examination importation was conducted using Temporary PACS, physicians were both decision makers and responsible creators. Moreover, the burden on physicians was low and the costs could also be kept low. Conclusion: We analyzed importation tasks involved in bringing external images into PACS. Our results indicate that, from the perspective of management and costs, it is most efficient to import images using Temporary PACS servers.

Research on Decision-making of Green Reverse Logistics in Enterprises: A Case Study on Electronic Products Manufacturers from the Perspective of South Africa

In recent years, the environmental problems caused by the traditional implementation of reverse logistics enterprises have become more and more serious. Especially for the enterprises of electronic products, the heavy metal pollution problems caused by the waste of electronic products have made more and more enterprises and researchers begin to seek a green approach. Based on the idea of “Cradle to Cradle” industry model, by the use of relevant theory of activity-based costing and quality management theory, the conceptual model of decision-making of reverse logistics activities for the electronic products manufacturing enterprises will be established; to decrease the influence on environment when implementing reverse logistics activities.

Activity Based Costing in Intercollegiate Athletic Departments: Is There Value in Using It?

The unstable financial landscape of intercollegiate athletics is an issue that many institutions struggle with on a yearly basis. Most research in this area has focused on financial inequalities (Lawrence, 2013; Zimbalist, 2013). Specifically, Lawrence (2010) has proposed a solution that the NCAA and its members consider adopting the Activity-Based Costing (ABC) management tool to manage the financial information accumulated by athletic departments, which they believe would help make costs more transparent. Athletic administrators of NCAA institutions are unclear about the broad financial inequities issues in intercollegiate athletics and the athletic accounting practices of their institutions. Given that Lawrence, Gabriel and Tuttle (2010) and Lawrence (2013) offer a solution to the problem by implementing ABC, it is unknown what athletic administrators think about this possibility. Therefore, the purpose of this study is to ask NCAA athletic administrators their perspectives on NCAA accounting practices. Specifically whether or not their athletic department uses ABC to help them understanding their costs and then to determine why or why they do not use ABC. Our results demonstrate that most athletic departments do not use ABC and the main reason they do not is that they don’t need the detailed information that ABC would provide. This paper helps to us get a better understanding of what athletic departments are doing to understand their costs and it helps to refute prior research claims that ABC would be useful for athletic departments.

The Expansion of Activity-Based Costing/Management in the Czech Republic

This paper aims to investigate the expansion of an advanced management tool - Activity-based costing/management (ABC/M) among Czech companies and to map the level of its utilization. The empirical survey was carried out among 548 Czech medium-sized and large companies from various economic sectors. The expansion of ABC/M has grown to 22% in 2013 which is comparable to neighbouring countries, but companies still use a relatively simple ABC/M model. They use only a limited extent of ABC/M and do not exploit all its possibilities.

Investigation and Priority-Identification of the Requirements of Applying Management Accounting Techniques in Industrial Companies of Iran

The vital role of management accounting on suitable data presentation for managers' decision-makings has been proved. Accordingly, management accounting must, by investigating the requirements of applying management accounting techniques and other available tools, provide managers with more precise and comprehensive data for their different decision-makings. Therefore, the present study has tried to identify and order the requirement priorities of applying management accounting techniques, based on the viewpoints of financial managers. The requirements of applying the techniques of management accounting have been classified into three groups of environmental requirements, technical-humanistic requirements and structural requirements. The research's intended techniques of management accounting also comprises balanced score cards, just-in-time management of availabilities, target costing, activity-based costing and total quality management. Data collection has been done by making use of Liker’s five-choice scale. Statistical population includes financial managers of industrial companies of Kermanshah province. Statistical sample contains 80 financial managers. Statistical T-Tests have been used to examine the research hypotheses. The investigation of the average differences has been carried out by Turkey Test and K-Square coefficient has been used for determining the significance of observations. The results of testing hypotheses depicted that all of environmental, technical-humanistic and structural requirements, from viewpoints of financial managers of above-mentioned companies, have been so important in applying management accounting techniques. Also it has been revealed that there is not significant difference between the importance of requirements and the importance of parts of each requirement is nearly the same.

Enterprise Performance Management: Making it Work

Enterprise performance management (EPM) is the integration of control and improvement methods imbedded with analytics. Its methods include the strategy map, balanced scorecards, costing (including activity based cost management), budgeting, forecasting and resource capacity requirements planning. These methods fuel other core solutions such as customer relationship management (CRM), supply chain management (SCM), risk management, and human capital management systems, as well as lean management and Six Sigma initiatives.

The Smooth Implementation of Activity Based Cost Management (ABCM) in the Public Service Organisation (PSO) in South Africa

This paper describes the procedure that allows public service organization to smoothly switch from traditional costing system to an Activity Based Costing system at low risk and with minimum investment. The aim of many contemporary national, provincial and local is to reinvent government through the application of private sector strategies and techniques (Kearney, Feldman, and Scavo 2000). The fundamental objective of reinvention is to strive for a government that works better and costs less. The purpose of this paper is to investigate if ABC can be a valuable tool to understand costs and provide more accurate costs of services in a public service organisation in South Africa; and to determine and implement the process improvements strategies in the public service organisation in South Africa. The results achieved show that the municipality would have an increase in profitability and be able to improve cost control. The overall results achieved indicate that ABCM has a significant role to play in the Public Service Organisation in South Africa.

Developing an Organizational Perspective to Management Accounting

B eing asked to make a short speech as part of accepting the award inevitably leads to some introspection and reflection on major factors that have influenced one’s career, be they events or individuals. Past recipients of the award have been very influential in putting management accounting on the map. Some have been instrumental in developing the way we think about management accounting and teach the subject; some have developed important perspectives such as information economics, combining economics with psychology, the importance of national culture, activity-based cost management, and balanced scorecards. The way these recipients developed their thoughts is well told in their acceptance speeches and collectively provides a wealth of ideas and a historical perspective on the development of our discipline. I commenced my studies in economics, and I maintain a keen interest in economic approaches to management accounting. However, early in my academic career, I was pressed into considering an organizational approach to management accounting, not because it was an easier option; rather it addressed the world of management accounting within which I found myself. In this address, I will share with you some personal reflections on the process of my discoveries in the area of organizational approaches to management accounting from the mid-1960s. The backdrop to this address is that research is something of a growth model. Stage 1: starting from a baseline of skills and knowledge gained at undergraduate studies; stage 2: progressing through refinement of skills with more graduate study; and stage 3: consolidating through work toward publications and other academic outputs. Stages 1 and 2 are somewhat planned and incremental, while stage 3 is more often associated with less ordered processes, often stumbling across potential research areas by way of reading and personal interactions. Research projects can be focused around existing ideas, sometimes being somewhat formulaic, sometimes highly innovative. Often ideas can be serendipitous and develop in unpredictable ways. The key is to recognize when there is a management accounting angle that will relate to an important organizational or social issue.

The Implementation, Application and Meeting the Challenges of Activity Based Cost Management (ABCM) Through Managing Change and Managing Project in the Local Government in South Africa

Modern government throughout the world face the same basic set of management challenges; to improve effectiveness by emphasizing outputs over inputs; to improve efficiency by managing costs, and to improve accountability by tying budget to performance. This increased emphasis on measurement has government executives struggling to adapt to business management framework to public sector. The purpose of this paper is 1) to investigate and identify the level of ABC implementation of in the public service organisation in South Africa; 2) to determine if ABC can be a valuable tool to understand costs and provide more accurate costs of services in a public service organisation in South Africa; 3) to determine and implement the process improvements strategies in the public service organisation in South Africa, and 4) to establish the relationship between ABC, managing change and managing project in public service organisation in South Africa. The results achieved indicate that both managing change and managing projects have a significant role to play during the implementation of ABC in the public service organization in South Africa.

A New Activity-Based Financial Cost Management Method

The standard activity-based financial cost management model is a new model of financial cost management, which is on the basis of the standard cost system and the activity-based cost and integrates the advantages of the two. It is a new model of financial cost management with more accurate and more adequate cost information by taking the R&D expenses as the accounting starting point and after-sale service expenses as the terminal point and covering the whole producing and operating process and the whole activities chain and value chain aiming at serving the internal management and decision.

“Target-Operation” Cost Management Model

Objective cost management and Activity-Based cost management are both more advanced cost management methods, but they are difficult to overcome their own shortcomings. In order to overcome the defects of these two methods of cost management, in the meanwhile, to find a new way to perfect the cost control system in enterprise, the writer planned to make this study. By analyzing and summarizing the domestic and international research results based on the integration of the Objective cost management and Activity-Based cost management, the writer pointed out the lack of current research and raised from the development, design, procurement, production and service to the full range of “Target-Operation” cost management, and designed three functional modules, including target cost estimate module, operation chain optimization module, cost breakdown and control module and auxiliary module to improve the model's content. This study offers a new way for the managers of enterprises in the field of cost control system and strengthening enterprise competitive power.

The influence of change agents' behavioral intention on the usage of the activity based costing/management system and firm performance: The perspective of unified theory of acceptance and use of technology

Abstract This study adopts the viewpoint of the Unified Theory of Acceptance and Use of Technology (UTAUT) model to examine the change agents' behavioral intentions in the implementation of an activity based costing/management (ABC/M) system. ABC/M is an important management system that emphasizes the allocation of overhead costs on the basis of cost drivers, in order to provide relevant information for improved decision-making. A change agent is a person chosen to cause organizational change. Senior managers and often chief executives usually play the role that implements change. The behavioral intentions have been identified as a proactive attitude and action for promoting the ABC/M system in this study. Since there is little evidence of ABC/M adoption outside the United States and European countries, this research used Taiwanese companies as the sample. Questionnaires were used to investigate the factors influencing change agents' behavioral intentions to promote ABC/M systems and the type of facilitating conditions that affected the extent of usage of ABC/M systems. The questionnaires were carried out through the perspective of user acceptance of information technology (IT). Furthermore, the aim of this paper is also to explore whether use of the ABC/M system will produce an improved effect on performance. The empirical results from 100 valid responses collected indicate that performance expectancy and social influence directly affect change agents' behavioral intentions. Both change agents' behavioral intentions and facilitation conditions are important constructs that affect the extent of usage of ABC/M systems. The extent of ABC/M usage is also significantly associated with relative financial and non-financial performance. The results demonstrate that the adaptive UTAUT model is applicable for measuring change agents' behavioral intentions in current implementations of ABC/M systems. The study also reveals the positive effect of change agents on the performance of ABC/M systems.