A Comparative Evaluation of the Usefulness of the Activity Based Costing (ABC) and Traditional Costing Information in E-Banking

Document Type : Research Paper

Authors

1 Prof. of Accounting, Shiraz University, Shiraz, Iran

2 Ph.D. Student of Accounting, University of Tehran, Iran

Abstract

Abstract: In this study the results of traditional versus Activity Based Costing (ABC) systems are investigated in electronic services of Iranian Agriculture Bank. To achieve the objectives, several methods and techniques are implemented. To calculate the cost per transaction based on the traditional method, archival studies are employed. To calculate the cost per transaction using ABC time and work studies is done, specifically to allocate the labor costs (as the major cost in the bank). Data Envelopment Analysis (DEA) is implemented to allocate overhead and supporting costs. Several statistical methods are also used to test the research hypotheses. To compare the result of the traditional versus ABC Compare Mean statistics. To evaluate the usefulness of the two methods based on the information collected from the bank managers (including 88 managers) using the questionnaire, ANOVA technique and factor analysis is implemented. The results showed that there is a significant difference between the two traditional and ABC systems. The findings observed that the mangers prefer the ABC information comparison with the traditional information. These results are examined in three key managerial decision making levels (budgeting, financial decision making and the strategic decision making) and similar results were found.

Keywords

References

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Accounting and Auditing Review
Volume 19, Issue 3
October 2012
Pages 119-138

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