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The Implementation of Activity-Based Costing in Malaysian Small and Medium-Sized Enterprises

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Research related to Activity-Based Costing within SMEs sector is very little. Therefore this research attempts to investigate the implementation of Activity-Based Costing in SMEs, its success factors and barriers to adoption. A questionnaire survey was conducted among Malaysian SMEs from manufacturing sector and a total of 108 completed responses were received. The result indicates that just 17% of respondents have implemented this technique. Most Activity-Based Costing’s users are at the adaptation stage. The success of this system is contributed by the level of the complexity of manufacturing environment and strong support from top management. Meanwhile, lack of resources, expertise, and cost factor are the main reasons for the rejection of ABC system in SMEs. This research suggests that ABC is more beneficial for firms within complex environment with high top management support. However the inherent difficulties of this system has hindered its wide acceptance within SMEs. This research adds a new empirical evidence on Activity-Based Costing related issues from the perspective of small businesses.
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Keywords: Activity Based Costing; Costing System; Malaysia; SMEs

Document Type: Research Article

Affiliations: Faculty of Technology Management and Business, Universiti Tun Hussein Onn, Malaysia

Publication date: April 1, 2017

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  • ADVANCED SCIENCE LETTERS is an international peer-reviewed journal with a very wide-ranging coverage, consolidates research activities in all areas of (1) Physical Sciences, (2) Biological Sciences, (3) Mathematical Sciences, (4) Engineering, (5) Computer and Information Sciences, and (6) Geosciences to publish original short communications, full research papers and timely brief (mini) reviews with authors photo and biography encompassing the basic and applied research and current developments in educational aspects of these scientific areas.
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