Proceedings of 9th Asian Business Research Conference
20-21 December, 2013, BIAM Foundation, Dhaka, Bangladesh ISBN: 978-1-922069-39-9
Opportunities and Barriers of Implementing ABC in Manufacturing
Organizations in Bangladesh.
Rehana Fowzia
In an increasingly competitive business environment, organizations seeking to
maintain or improve their competitiveness need cost information that is accurate and
relevant. In order to overcome the over-generalizations of traditional costing systems,
with their excessively simplified cost allocations and resulting lack of visibility for
indirect costs, organizations have been adopting activity-based costing (ABC)
systems. Activity-Based Costing (ABC) has been popular since the 1980s because it
prevents cost distortions and provides a process view which traditional cost
accounting cannot provide. Activity-Based Costing is based on a “flow view” in
production theory in that ABC adopts two-staged costing, i.e., resources are assigned
to activities and activities are assigned to cost objects. This study focuses on the
advantages of ABC which are motivational factors to use ABC for the manufacturing
organizations in Bangladesh. It also examines the disadvantages of ABC for which the
manufacturing organizations are not being used ABC still now.
Keywords: Activity-based Costing (ABC), Manufacturing organizations, Opportunities, Barriers.
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Rehana Fowzia, Assistant Professor, Department of Business Administration, Stamford University Bangladesh. Email:
rehana.fowzia@gmail.com, Contact: 01715347976