TITLE

The Effect of Activity-Based Costing on Firms Performance, A Study Among Chinese Manufacturing Firms

AUTHOR(S)
Zhang Yi Fei; Che Ruhana Isa
PUB. DATE
September 2011
SOURCE
Journal of Applied Sciences Research;Sep2011, Vol. 7 Issue 9, p227
SOURCE TYPE
Academic Journal
DOC. TYPE
Article
ABSTRACT
Problem statement: Assessing the effect of ABC success implementation on the firms' performance is considered as an important research topic. Previous empirical studies provide the evidence that the implementation of ABC could improve firms both financial performance and nonfinancial performance. However, the researches on the relationship between ABC implementation and firms' performance are relatively few, especially in Chinese context. Due to the limitation of financial performance, this study investigates the role of Activity-Based Costing (ABC) in predicting the improvements in firms' performance, namely, manufacturing performance and business performance among manufacturing firms in China. Approach: Survey questionnaire was delivered to Chief Financial Officers (CFO), Financial Control of 1000 manufacturing firms listed on Chinese Chamber of Commerce and Industry 2008 directory. There were 106 usable responses representing 10.6% of response rate. This study hypothesized that ABC success implementation could result in firms manufacturing performance, as well as business performance. Factor analysis was applied to reduce data, and regression was used to test research hypothesis. Results: The findings of this research showed that respondents generally achieved a moderate level of success of ABC implementation. The success of ABC implementation leads to the decrease in manufacturing cycle time. In addition, ABC success implementation was found to be impact the attainment of target to costs, productivity, quality, profit, sales, as well as service. However, this research failed to find a significant association between ABC success implementation and attainment of target to market share. ABC success implementation could results in the improvement in manufacturing performance and business performance.
ACCESSION #
69735078

 

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