Senior Lecturer, Nwafor Orizu College of Education, Nsugbe Anambra State, Nigeria.
The major Objective of the research is to establish the effect of Activity Based costing on Production Performance of manufacturing firms in Nigeria. Ex-post facto research design was adopted. secondly data were collected from a sample of twenty (20) production companies out of twenty one (21) production Industries currently Practicing Activity-Based Costing all quoted with the Nigeria stock exchange for the research. Data on annual time series of total cost, Inventor, revenue, Income and Operating profit were obtained from annual financial report of the sample production companies. A regression statistical analysis and a chow test analysis Indicates that the application of ABC method significantly Influence the level of Inventory management in production Industries. Also, the study finds out that the application of ABC system has a great effect on revenue generation of production Industry. Finally, it was discovered that profit of Production industries Influenced by the application of ABC system method of costing. The findings of the study, indicates that cost of products remains the most important variables in the determination of production firm's profits. The findings implies that production Industries should make effort to understand cost drives in their production firms with view to accurately costing their products. Based on the results of the analysis, it was recommended that production firms should have deep insight into the make-up of their product's cost and the activities involved in the process. Also, those production technologies and more than one product line should embrace ABC method.
Abstract: Activity-based costing (ABC) and Data Envelopment Analysis (DEA) share similar views of resource consumption in the production of outputs. While DEA has a high level focus typically using aggregated data in the form of inputs and outputs, ABC is more detailed and oriented around very disaggregated data. We use a case study of immunisation activities in 24 New Zealand primary care practices to illustrate how DEA and ABC can be used in conjunction to improve performance analysis and benchmarking. Results show that practice size, socio-economic environment, parts of the service delivery process as well as regular administrative tasks are major cost and performance drivers for general practices in immunisation activities. It is worth noting that initial analyses of the ABC results, using contextual information and conventional methods of analysis such as regression and correlations, did not result in any patterns of significance. Reorganising this information using the DEA efficiency scores has revealed trends that make sense to practitioners and provide insights into where to place efforts for improvement.
Pub.: 13 Aug '10, Pinned: 14 Sep '17