Activity Based Costing Systems

1188 Words5 Pages
Activity-Based Costing Systems
Research Paper

|Matthew East |
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What is the motivation for ABC implementation? (Agbejule, 2006, p. 42)
2. What are the stated objectives when ABC is designed and how does the actual design and implementation of ABC conforms to these stated objectives? (Agbejule, 2006, p. 42)
3. How does the ABC implementation become institutionalized over time? That is, how do external legitimating functions become internal reality? (Agbejule, 2006, p. 42)
4. What role did ABC play in practice within the organization? (Agbejule, 2006, p. 42)
Mr. Agbejule states that the “main reasons for empirically studying these questions are as follows”: First, the four questions deal with the conditions and consequences of the use of ABC within organizations. Second, the reason for studying these four questions is that they attempt to cover events before and after the introduction of ABC, thus capturing the dynamic characteristics of change over time. Most of the studies of ABC implementation deal with the overall process of implementation without examining the events after implementation. Third, the research question can help in highlighting factors that are important at different implementation stages (Agbejule, 2006, p. 42).
The implementation of an Activity-Based Costing system would in many ways help a company due to the simplistic process for which it accounts for materials and direct labor. According to James D. Tarr, MBA “Activity Based
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