Summary
This study aimed to identify the ability of applying the Activity Based Management (ABC) system in the Jordanian Private Universities, which required the availability of: The needed information as one significant condition of applying the system, and qualified employees with managerial and financial skills needed for applying the ABC system, in order to solve the study problem represented by the public image about the high cost for higher education in the Jordanian Universities. The sample of this study includes (6) private Universities in Jordan. The study's result indicated that applying the traditional costing system causes high cost for the students. The study also pointed out that applying ABC system in the Universities is possible because of the availability of the needed information. The main challenges that may face the applying process are: the lack for qualified employees, applying the new system may take a long time. The study presented the following recommendations to overcome these challenges.(a).Improving the employees' skills by training and using the external expertise. (b)Creating a practical database for the interest of the new system.
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Extract
The Systematic Relationship Between the Activity Based Management (Abm) and the Activity Based Costing (Abc)
1. Introduction
Business enterprises in today's competitive environment seek to determine the profitability of each activity within their operations, and their customers as a final user of the outputs of these activities, especially in the services sector.Manufacturing firms which produce a final product, like cars, home appliances and others, the cost of unit produced comprises three types of costs, which are direct material, direct labor, and any cost of manufacturing except direct material and direct labor, this third element is called manufacturing overhead. Any simple accounting system can easily trace both direct labor and direct material to individual units of product. But the manufacturing overhead item includes costs such as; salaries, equipment's depreciation, selling and administrative costs, and maintenance expenses, that are likely to be more difficult in tracing them to the units of products.Managers in any type of business seek for more accurate information about costs in order to make the right decision either in pricing, or in resources allocating, and because the traditional costing systems are often unable to determine accurately the actual costs of production and the costs of related services, that lead managers to make decisions based on inaccurate data especially where there are multiple products, either goods or services.The Accounting system must provide information that will enable the institution to comply with the requirements of (GAAP) and (SFAS). Financial analysis and other data intended for internal management purposes are not required to be in compliance with GAAP (FASB Standards). The only limiting criterion applicable to internally generated information must justify the cost of providing it.For these reasons, many organizations shifted to use the concepts of ABC, ABC system was developed in the manufacturing sector of the United States duri...See the full content of this document
(Copyright 2011)
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