Impact of activity-based costing implementation on performance of selected manufacturing firms in Kwara State, Nigeria.
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Date
2016-07
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Publisher
Institute of Chartered Accountants of Nigeria (ICAN)
Abstract
The implementation of Activity-Based Casting (ABC) in manufacturing firms is relevant for the determination of accurate costing information, attainment of cost advantage and enhancement of performance. The main objective of the study was to investigate the extent of implementation of ABC by manufacturing firms in Kwara State and examine its impact on performance of firms using this technique. A cross-sectional survey design was employed for the study and questionnaire administration was used for data collection. Twenty eight (28) manufacturing firms in Kwara State formed the sample of the study. The data collected were analysed using both descriptive statistics and regression analysis. Specifically, the Ordinary Least Square (OLS) method was used in testing the hypotheses formulated. The findings of the study showed that ABC is moderately implemented in the manufacturing firms in Kwara State, as 35% of the firms indicated they are implementing this technique. The testing of the hypotheses showed that ABC implementation has a positive impact on accurate cost information and firm performance. The study concludes that when accountants are well trained and work in an improved technology environment, ABC can be effectively implemented and will have a positive impact on its performance. The study recommends among others that: manufacturing firms that are yet to start the implementation of ABC, should do so, as it can improve their performance where the right environment exists; Accounting professional bodies should improve on the scope of their Mandatory Continuous Professional Education MCPE) programme to include training on the implementation of modern costing techniques, such as the ABC system.
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Keywords
Activity-based costing, accurate cost information, performance, Accountant competency, and Technology growth,
Citation
Adigbole, E.A. and Oludoyi, S.B (2016). Impact of activity-based costing implementation on performance of selected manufacturing firms in Kwara State, Nigeria. ICAN Journal of Accounting and Finance, Special Edition, 1, 20 -30,