ANALYSIS OF ACTIVITY-BASED COSTING: A COMPARATIVE STUDY IN A CONCRETE MANUFACTURING PLANT.

Abstract

The last few years have been marked by significant market changes. The current competitive environment suggests needs for changing the way companies manage their costs to provide continuity of their market. Therefore, it is important to have adequate control and the correct allocation of costs. This paper seeks to identify the most appropriate method of apportionment to control costs in a large company that operates in the field of concrete engineering. For comparison, two scenarios of different costing, ABC (Activity-Based Costing) method and departmentalization one were used. For this research, quantitative cost data of the company were collected and double checked through interviews with managers. From the study it was possible to realize that the ABC method adapts to companies working in the construction segment, because the system gives managers better view of their costs by providing information that can assist in decision making. The method seeks to reduce the distortions caused by arbitrary apportionment of indirect costs, making analysis of the costs significant activities in the company and defining its drivers. In addition, the survey provided to the organization the adequate conditions to analyze and visualize all costs in a more detailed way, obtaining an absolute control over all spending.