Activity based costing implementation success in Australia

Abstract

[Abstract]: It has been asserted that Activity-Based Costing (ABC) is a procedure which improves the accuracy of product/service costing and also assists managers in understanding and evaluating how resources are used across a firm’s value-chain in delivering strategic outcomes. However worldwide adoption rates of ABC are relatively low and, it is claimed that the rate of new adoptions is declining. This could suggest that ABC is not perceived as being successful in delivering expected benefits. Based on a similar research study in the US, this project surveyed a number of Australian organizations to gauge whether they perceived their ABC implementation to be successful or not. The findings indicate that Australian organizations that have fully implemented ABC view it as successful compared with traditional cost management systems, the results being similar but stronger than those found in the US study. This raises the question of why are existing adoption rates relatively low, and the rate of new adoptions allegedly declining.