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The Effect of Activity-Based Costing (ABC) on Managing the Efficiency of Performance in Jordanian Manufacturing Corporations – An Analytical Study

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  • Nabil Bashir Al-Halabi
  • Omar Fareed Shaqqour

Abstract

The study explored the effect of  activity-based costing (ABC) on the efficiency of performance in Jordanian manufacturing corporations. A questionnaire form was designed and distributed to a sample of 72 managers in 20 manufacturing corporations, and data were collected and analyzed using EXCEL and SPSS packages. The results found that the application of ABC has a significant effect on managing resources, performance efficiency, cost reduction, and costs of unused capacity in Jordanian manufacturing corporations. The conclusion showed that ABC were able to differentiate between high and low volume products among different activities of manufacturing corporation in Jordan. The research also concluded that the main difficulties were in differentiating between value added and non value added activities, unclear strategies, and incomplete information for decision making processes, thus, whatever activity-slack existed more levels of cooperation also existed between members of the value chain (VC). The study recommended more application of the ABC in different corporations as proved its effect on pricing decisions, cost reduction and a competitive ability of corporations in different markets.Â

Suggested Citation

  • Nabil Bashir Al-Halabi & Omar Fareed Shaqqour, 2018. "The Effect of Activity-Based Costing (ABC) on Managing the Efficiency of Performance in Jordanian Manufacturing Corporations – An Analytical Study," Accounting and Finance Research, Sciedu Press, vol. 7(1), pages 262-262, February.
    • Handle: RePEc:jfr:afr111:v:7:y:2018:i:1:p:262
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    References listed on IDEAS

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    1. Lin, Wen-Cheng, 2012. "Financial performance and customer service: An examination using activity-based costing of 38 international airlines," Journal of Air Transport Management, Elsevier, vol. 19(C), pages 13-15.
    2. Sunil Dutta & Frank Gigler, 2002. "The Effect of Earnings Forecasts on Earnings Management," Journal of Accounting Research, Wiley Blackwell, vol. 40(3), pages 631-655, June.
    3. Askarany, Davood & Yazdifar, Hassan & Askary, Saeed, 2010. "Supply chain management, activity-based costing and organisational factors," International Journal of Production Economics, Elsevier, vol. 127(2), pages 238-248, October.
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    Cited by:

    1. Obiedah Mohammad Alqudah & Safrul Izani Mohd Salleh, 2023. "The Realities and Expectations of Calculating Government Service Costs: An Analysis of Jordanian Hospitals," International Journal of Economics and Financial Issues, Econjournals, vol. 13(1), pages 65-72, January.

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    More about this item

    JEL classification:

    • R00 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General - - - General
    • Z0 - Other Special Topics - - General

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