Appreciate the impact of relevant costing for decision making in Ready-Made Garments (RMG) industry of Bangladesh

Mohammad Mazibar Rahman and Saiful Islam
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Mohammad Mazibar Rahman: Hajee Mohammad Danesh Science and Technology University, Bangladesh
Saiful Islam: Hajee Mohammad Danesh Science and Technology University, Bangladesh

Theoretical and Applied Economics, 2014, vol. XXI, issue 7(596), 87-98

Abstract: Relevant costing is a management accounting term that relates to focusing on only the costs relevant to a specific decision being made. It simplifies the decision-making process as it ignores cost data that is irrelevant, or will not have an impact on the specific decision being made. This study adopts an observation of quantitative methodology with primary and secondary data in view of the nature of the analysis. Relevant costing is often used in short-terFm decision making and a number of specific practical examples are illustrated in this study. This study has been designed to achieve the objective of assessing the level of perceptions of four areas such as (i)making & buying, (ii) dropping or retaining a segment, (iii) constrained resources and (iv) special orders in using relevant costing in Ready-made Garments Industry (RMG) of Bangladesh. To attain this objective total 100 sample respondent company from Ready-made Garments Industry (RMG) have been randomly selected. By using variance analysis, authors have found that all four factors have significant influence in using relevant costing. Last, the result of this study suggests that the strengthening the decision-making mechanism required a strong relevant costing benefits and its proper application.

Keywords: Relevant costing; Decision Making (DM); Make or Buy; Special Order; Constrained Resources; Dropping or Retaining Segment and Ready-made Garments Industry (RMG) etc. (search for similar items in EconPapers)
Date: 2014
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