Activity-Based Costing: Helping Small and Medium-Sized Firms Achieve a Competitive Edge in the Global MarketplaceMehmet C Kocakulah1*, Abbas Foroughi1, Ann Stott2 and Lionel Manyoky3
- *Corresponding Author:
- Mehmet C Kocakulah
Professor, Department of Accounting and Business
University of Southern Indiana, Evansville, USA
Tel: 812 4641730
E-mail: [email protected]
Received date: June 22, 2017; Accepted date: July 12, 2017; Published date: July 19, 2017
Citation: Kocakulah MC, Foroughi A, Stott A, Manyoky L (2017) Activity-Based Costing: Helping Small and Medium-Sized Firms Achieve a Competitive Edge in the Global Marketplace. J Account Mark 6: 245. doi: 10.4172/2168-9601.1000245
Copyright: © 2017 Kocakulah MC, et al. This is an open-access article distributed under the terms of the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original author and source are credited.
Since the 1970s, activity-based costing (ABC) has enabled companies to identify the true costs of processes and products and to make sound decisions related to the profitability and expense of the products they produce, as well as the effectiveness of their manufacturing and business processes. This paper explores the advantages of activity-based costing vs. traditional costing systems and presents arguments for the potential benefits to the world’s millions of small to medium business (SMEs) from implementing ABC. Issues related to the implementation of ABC are discussed. A framework for ABC implementations in SMEs is presented that shows the variables (characteristics of SME and implementation challenges) that can impact the ABC implementation process, and/or ultimately, implementation outcomes.