The strategic implications of Activity Based Costing for a manufacturing company in South Africa
Date
2014-10-10
Authors
Beukes, Ian
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Abstract
This case study research was based on a manufacturing company competing in
the packaging industry. The complex nature of this business unit provided the
depth and representative elements to support the relevance of the study.
The case aimed to evaluate the change in product profitability and subsequent
business strategy implications once Activity Based Costing (ABC) is
implemented.
The initial and final stages of qualitative data collection involved the role players
who represent the different business functions. This data was also
supplemented with recoded financial statements.
Results from the study presented the changes to profitability when ABC is
applied and constructs the consequential emergence of business strategy
elements identified by key stake holders.
Manufacturing companies adopting this costing method will benefit from more
relevant information enabling continuous improvement and pricing accuracy to
ensure a competitive advantage in their market.
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Keywords
Activity-based costing, Cost accounting -- South Africa.