APPLICATION OF ACTIVITY BASED COSTING IN MANUFACTURING COMPANIES IN BANGLADESH: A SURVEY BASED STUDY

摘要

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.