A Study on Application of Activity Based Costing In Komaj Saba Industrial Complex (Khootka), Iran.

摘要

Activity-Based Costing (ABC) developed in the 1980s due to limitations in traditionalcost accounting method. Keeping this in view, an attempt is made to study the ABC andits applicability for food industry i.e., KSFIC, Iran. The main objective of the study is toanalyze the application of the ABC system of accounting for Komaj Saba FoodIndustrial Complex (Khootka), Iran. The present study is confined to the existing VBCaccounting system and compared with ABC which is proposed accounting system as anapplication of activity based costing system in Komaj Sabah Food Industrial Complexof Iran as a case study and covers a period of one year from 2006-2007. The rsultindicates that the profit of the first product Biscuit is lower in VBC method due to highoverhead cost but for the products like Wafer and Chocolate is less, candy, cake &spaghetti is much higher in ABC method because the less overhead cost in activitybased costing method. The reason loss for Spaghetti and Cake is due to the unusedexisted capacity of the product lines. As a result non-value added activities of the samecaused increase in cost and the decline in profit. The VBC method in above tableindicates that inappropriate allocation of cost caused deterioration in the profits of theproducts. The reason for low profit in Spaghetti and Cake under VBC method istransferring the indirect costs to Biscuit, Wafer, Chocolate and Candy.