How ABC is implemented and used to measure customers profitability and product profitability

by

ABSTRACT

This research study is conducted to examine the implementation of activity-based costing (ABC) and its utilization for measuring the customer's profitability and product profitability. To accomplish this aim a survey is conducted with the employees of Nigerian commercial bank to examine the impact of ABC techniques on the bank performance. Activity based costing (ABC) is recognized as a strategic management accounting technique that is able to improve traditional costing of indirect costs. The ABC method of accounting involves the breakdown of a system into individual activities and costing of the amount of time and resources spent on each activity to manufacture a product. The findings of this study indicate that the ABC is an appropriate technique to increase the consumer and product profitability of the bank. An activity-based system can provide a clearer framework and convenient to get a much more precise cause-effect relationship between the absorption bases and costs. These differences can be substantial, the implantation of ABC can provide a significantly different product lines that displayed by a conventional system cost.

TABLE OF CONTENTS

ABSTRACTII

CHAPTER # 4: RESULTS AND FINDINGS1

Introduction1

Demography of Respondents1

Perception of Respondents2

Correlation Analysis11

Summary12

CHAPTER # 5: CONCLUSION14

REFERENCES16

APPENDIX18

Questionnaire18

CHAPTER # 4: RESULTS AND FINDINGS

Introduction

This chapter presents the findings of the research study which is conducted to examine the implementation of activity-based costing (ABC) and its utilization for measuring the customer's profitability and product profitability. A questionnaire survey is conducted with the employees of Nigerian commercial bank to examine the impact of ABC techniques on the bank performance. The target respondents of this questionnaire survey are the branch managers and head marketing officers who have share their opinion about the ABC implantation for the consumer profitability and the product profitability of the bank. The section below presents the findings of survey.

Demography of Respondents

Gender

Frequency

Percent

Valid Percent

Cumulative Percent

Valid

Male

36

72.0

72.0

72.0

Female

14

28.0

28.0

100.0

Total

50

100.0

100.0

The above table and pie chart presents the findings of gender distribution of respondents who have taken part in this research study. There were 72 percent of the respondents who took part in this research study are males whereas, 28 percent of the survey respondents were females.

Designation of Respondents

Frequency

Percent

Valid Percent

Cumulative Percent

Valid

Marketing Officer

25

50.0

50.0

50.0

Branch Manager

13

26.0

26.0

76.0

Marketing Manager

12

24.0

24.0

100.0

Total

50

100.0

100.0

The above table presents the findings of designation of the respondent's who9 have taken part in this particular research study. There were 50 percent of the respondents who have taken part in this research study are working as marketing officer in Nigerian commercial bank. There were 26 percent of the respondents who have taken part in this research study are working as branch manager in Nigerian commercial bank. There were 24 percent of the respondents who have taken part in this research study are working as marketing manager in Nigerian commercial bank.

Perception of Respondents

The top management of bank are capable to provide strong active support for the ABC initiatives.

Frequency

Percent

Valid Percent

Cumulative Percent

Valid

Extremely unimportant

1

2.0

2.0

2.0

Unimportant

1

2.0

2.0

4.0

Neutral

9

18.0

18.0

22.0

Important

25

50.0

50.0

72.0

Extremely important

14

28.0

28.0

100.0

Total

50

100.0

100.0

The above table depicts the findings of “The top management of bank is capable to provide strong active support for the ABC initiatives”. The responses were taken by using five point likert ...