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 ...