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The implementation of activity-based costing and the financial performance of the Jordanian industrial shareholding companies

Author

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  • Husam Aldeen Al-Khadash
  • Mahmoud Nassar

Abstract

The purpose of this study is to investigate the improvement in financial performance associated with the use of activity-based costing (ABC). Data were obtained through a cross-sectional mail survey of financial managers who furnished information regarding company financial performance, the extent of ABC usage, and the enabling conditions that have been identified in the literature as affecting ABC efficacy. Data were obtained from the Jordanian shareholding companies as of the end of 2009. Regression analysis is used to test the association between the awareness level of using ABC and the level of adopting ABC. It is also used to identify the improvement in ROA as a mean of financial performance which associated with ABC initiatives. Results show that the awareness level of using ABC is high among the financial managers, but ABC implementation is not high; also it is found that there is a positive association between ABC and improvement in ROA.

Suggested Citation

  • Husam Aldeen Al-Khadash & Mahmoud Nassar, 2010. "The implementation of activity-based costing and the financial performance of the Jordanian industrial shareholding companies," Afro-Asian Journal of Finance and Accounting, Inderscience Enterprises Ltd, vol. 2(2), pages 135-153.
    • Handle: RePEc:ids:afasfa:v:2:y:2010:i:2:p:135-153
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    Cited by:

    1. Laith Akram Muflih Al-Qudah & Yusuf Ali Khalaf Al-Hroot, 2017. "The Implementing Activity-based Costing Technique and Its Impact on Profitability: A Study of Listed Manufacturing Companies in Jordan," International Journal of Economics and Financial Issues, Econjournals, vol. 7(2), pages 271-276.

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