Activity-Based Costing in New Zealand
Activity Based Costing in New Zealand
An investigation of users and non-users of ABC and the differences relating to strategy, satisfaction, complexity, perceived advantages and performance, as well as the importance of support in the New Zealand firm environment. Sarah Moll
A dissertation submitted as a partial requirement for the degree of BCom(Hons) at the University of Otago, Dunedin,
New Zealand
17th October 2005
Abstract
This dissertation explores Activity-Based Costing (ABC) in the New Zealand firm environment. A questionnaire is distributed to users and non-users of ABC, in order to determine the differences between these two groups in relation to the perceived advantages of ABC, organisational complexity, satisfaction with costing, and performance.
The
influence of top management support and whether a particular strategy is evident is also examined in relation to ABC users.
The results indicate that ABC users or those considering an ABC adoption have a more optimistic perception of advantages realised from ABC than non-users. No particular strategy is employed by ABC users and it also apparent that not all companies consider
ABC to be tied to their competitive strategy. It is also found that not all elements of complexity necessarily precede an ABC adoption. A significant difference in satisfaction with costing is indicated between ABC users and non-users who are considering or have considered and rejected ABC. Similarly, a statistically significant difference is found between the performance of ABC users and non-users when it is indicated that the benefits of ABC outweighed the costs.
The results suggest that ABC is beneficial in the New Zealand firm environment.
Exploring the extent of implementation and influences such as size and industry in future research will add to the understanding of ABC in the New Zealand firm environment.
ii
Acknowledgements
The following dissertation would not have been possible without the help and support of
An investigation of users and non-users of ABC and the differences relating to strategy, satisfaction, complexity, perceived advantages and performance, as well as the importance of support in the New Zealand firm environment. Sarah Moll
A dissertation submitted as a partial requirement for the degree of BCom(Hons) at the University of Otago, Dunedin,
New Zealand
17th October 2005
Abstract
This dissertation explores Activity-Based Costing (ABC) in the New Zealand firm environment. A questionnaire is distributed to users and non-users of ABC, in order to determine the differences between these two groups in relation to the perceived advantages of ABC, organisational complexity, satisfaction with costing, and performance.
The
influence of top management support and whether a particular strategy is evident is also examined in relation to ABC users.
The results indicate that ABC users or those considering an ABC adoption have a more optimistic perception of advantages realised from ABC than non-users. No particular strategy is employed by ABC users and it also apparent that not all companies consider
ABC to be tied to their competitive strategy. It is also found that not all elements of complexity necessarily precede an ABC adoption. A significant difference in satisfaction with costing is indicated between ABC users and non-users who are considering or have considered and rejected ABC. Similarly, a statistically significant difference is found between the performance of ABC users and non-users when it is indicated that the benefits of ABC outweighed the costs.
The results suggest that ABC is beneficial in the New Zealand firm environment.
Exploring the extent of implementation and influences such as size and industry in future research will add to the understanding of ABC in the New Zealand firm environment.
ii
Acknowledgements
The following dissertation would not have been possible without the help and support of
References: Sulaiman, M., Ahmad, N. N., & Alwi, N. (2002). Management accounting practices in Malaysia: a survey of the industrial and consumer products sectors Sulaiman, M., Ahmad, N. N., & Alwi, N. (2004). Management accounting practices in selected Asian countries: A review of the literature Swenson, D. (1995). The benefits of activity-based cost management to the manufacturing industry Swenson, D., & Barney, D. (2001). ABC/M: Which companies have success? The Journal of Corporate Accounting & Finance, 12(3), 35. Tan, L. M., Fowler, M. B., & Hawkes, L. (2004). Management accounting curricula: striking a balance between the views of educators and practitioners Walters, A. (2003). Key performance measurement references. Retrieved 10th September, 2005, from (Doyle, 2002, p.1). The cumulative cost of each activity is then traced to products or services that make that activity necessary to activities (Kennedy & Affleck Graves, 2001).