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European Online Journal of Natural and Social Sciences

Activity-based costing and its impact on management accounting

Heydar Mohammadzadeh Salteh, Mohammad Hedayati, Ali Harzandi, Bahram Mehdi Pashaee


It would be impossible to improve productivity in the industrial and service units, both in the governmental and non-management firms without changing the current system into an effective one. There are needs for changes in management structure and new tools, including accounting management. Unfortunately, what the majority of business managers have considered as accounting is financial accounting, whose duty is to register, classify, and summarize financial events and they should provide periodic reports to show the financial position and results of firms in the world. However, current competitive dependence on financial accounting data cannot be adequate guidelines for managers and decision makers. In this paper, an overview of the ABC and its brief history and analysis related to other aspects of this process is presented and the use of tools and an efficient development of relevant strategies and challenges are discussed.


Cost accounting, activity-based costing, management accounting

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