The Benefits of the ABC Method Application in Croatian Companies
New business environment has changed the structure and behaviour of company costs. The changes are primarily reflected in the increasing share of overhead costs in the total costs. Given that competitiveness is reflected in the unit product cost, the exact determination of unit costs by cost drivers...
| Main Author: | |
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| Format: | Article |
| Language: | English |
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Faculty of Economics and Business in Osijek
2013-07-01
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| Series: | Ekonomski Vjesnik |
| Subjects: | |
| Online Access: | http://hrcak.srce.hr/file/159393 |
| _version_ | 1827363883944247296 |
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| author | Dubravka Pekanov-Starčević |
| author_facet | Dubravka Pekanov-Starčević |
| author_sort | Dubravka Pekanov-Starčević |
| collection | DOAJ |
| description | New business environment has changed the structure and behaviour of company costs. The changes are primarily reflected in the increasing share of overhead costs in the total costs. Given that competitiveness is reflected in the unit product cost, the exact determination of unit costs by cost drivers, primarily the
precise allocation of overhead costs to cost drivers, have become crucial to the survival of companies in a turbulent market environment. The biggest problem in determining the exact product costs is incorrect allocation of overhead costs to cost drivers. In the 1980s, a new method of allocating overhead costs was developed – activity-based costing (ABC method). Advocates of this method claim that it allows a more accurate determination of product costs and identification and elimination of activities that do not add
value to the company, thereby reducing costs and increasing profits, and ultimately creating and sustaining a competitive advantage. Using a sample of Croatian companies listed on the Zagreb Stock Exchange, we investigated to which extent they applied activity-based costing; its benefits to the cost management system, and which factors influenced the application of this methodology. This study provides a new insight into the development of cost management systems in Croatian companies. |
| first_indexed | 2024-03-08T07:57:38Z |
| format | Article |
| id | doaj.art-4b725ad6be424a58974640d8d6d63869 |
| institution | Directory Open Access Journal |
| issn | 0353-359X 1847-2206 |
| language | English |
| last_indexed | 2024-03-08T07:57:38Z |
| publishDate | 2013-07-01 |
| publisher | Faculty of Economics and Business in Osijek |
| record_format | Article |
| series | Ekonomski Vjesnik |
| spelling | doaj.art-4b725ad6be424a58974640d8d6d638692024-02-02T13:18:38ZengFaculty of Economics and Business in OsijekEkonomski Vjesnik0353-359X1847-22062013-07-01XXVI1160160The Benefits of the ABC Method Application in Croatian CompaniesDubravka Pekanov-Starčević0Faculty of Economics of University of OsijekNew business environment has changed the structure and behaviour of company costs. The changes are primarily reflected in the increasing share of overhead costs in the total costs. Given that competitiveness is reflected in the unit product cost, the exact determination of unit costs by cost drivers, primarily the precise allocation of overhead costs to cost drivers, have become crucial to the survival of companies in a turbulent market environment. The biggest problem in determining the exact product costs is incorrect allocation of overhead costs to cost drivers. In the 1980s, a new method of allocating overhead costs was developed – activity-based costing (ABC method). Advocates of this method claim that it allows a more accurate determination of product costs and identification and elimination of activities that do not add value to the company, thereby reducing costs and increasing profits, and ultimately creating and sustaining a competitive advantage. Using a sample of Croatian companies listed on the Zagreb Stock Exchange, we investigated to which extent they applied activity-based costing; its benefits to the cost management system, and which factors influenced the application of this methodology. This study provides a new insight into the development of cost management systems in Croatian companies.http://hrcak.srce.hr/file/159393ABC methodoverhead costscost management |
| spellingShingle | Dubravka Pekanov-Starčević The Benefits of the ABC Method Application in Croatian Companies Ekonomski Vjesnik ABC method overhead costs cost management |
| title | The Benefits of the ABC Method Application in Croatian Companies |
| title_full | The Benefits of the ABC Method Application in Croatian Companies |
| title_fullStr | The Benefits of the ABC Method Application in Croatian Companies |
| title_full_unstemmed | The Benefits of the ABC Method Application in Croatian Companies |
| title_short | The Benefits of the ABC Method Application in Croatian Companies |
| title_sort | benefits of the abc method application in croatian companies |
| topic | ABC method overhead costs cost management |
| url | http://hrcak.srce.hr/file/159393 |
| work_keys_str_mv | AT dubravkapekanovstarcevic thebenefitsoftheabcmethodapplicationincroatiancompanies AT dubravkapekanovstarcevic benefitsoftheabcmethodapplicationincroatiancompanies |