ACTIVITY-BASED COSTING IN THE MANUFACTURING SECTOR: A MANAGERIAL INSTRUMENT FOR DECISION-MAKING

Ioana D. Bufan
Additional contact information
Ioana D. Bufan: Faculty of Economics and Business Administration, WEST University of Timisoara, Romania

SEA - Practical Application of Science, 2014, issue 3, 73-79

Abstract: The aim of this paper is to emphasize the importance of using the activity-based costing (management) system in the manufacturing sector. The utility of the ABC (ABM) system concerns decisions taken at a strategic and operational level. In our country, few managers understand the need for such a system and many Romanian companies use only a traditional costing system or don’t use one at all. The paper also includes a case study which is a small example of using the ABC method in a Romanian manufacturing company. The study shows that the ABC/ABM system helps managers to properly manage indirect costs (by activities) and understand the profitability of products, distribution channels and customers. Therefore, it offers a powerful instrument for decision-making. Although ABC is a new system of cost calculation that is absolutely necessary, in most cases the ABC method must be implemented in addition to the traditional costing systems, which are essential for the purposes of management accounting.

Keywords: Activity-based costing; Activity-based management; Manufacturing sector; Decision-making; Costing systems; Management accounting (search for similar items in EconPapers)
JEL-codes: M11 M41 M49 (search for similar items in EconPapers)
Date: 2014
References: Add references at CitEc
Citations:

Downloads: (external link)
http://seaopenresearch.eu/Journals/articles/SPAS_3_9.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cmj:seapas:y:2014:i:3:p:73-79

Access Statistics for this article

SEA - Practical Application of Science is currently edited by Romanian Foundation for Business Intelligence

More articles in SEA - Practical Application of Science from Romanian Foundation for Business Intelligence, Editorial Department
Bibliographic data for series maintained by Serghie Dan ().