Designing a model and historical cost calculation of services by ABC method and budgeting By ABB method

Abstract

This study deals with the design of the historical cost calculation model by Activity Based Costing (ABC) method and budgeting model based on the Activity Based Budgeting (ABB) in the municipality of Sirik Port. The present study is a descriptive-survey type with operating approach and applied results. The activity and output cost were calculated by using activity-based costing method and then budget was anticipated based on the activity. First, the historical cost of services was calculated by (ABC) method and then was compared to the historical cost of the current municipal accounting systems that was calculated by traditional (conventional) methods to determine whether there is a significant difference between these two costing methods or not. Also, the budget anticipated by (ABB) method is compared to the budget compiled by conventional method to determine whether there is a significant difference between these two methods of budgeting or not. Finally, whether the Activity Based Costing and Activity Based Budgeting can be used in the municipality of Sirik Port or not. The results indicate that there is significant difference between the activity-based historical cost with available traditional costing methods and also between activity-based budgeting with budgeting by traditional (conventional) method. Also there is the calculating possibility of the historical cost of service by (ABC) method and budgeting by (ABB) method in the municipality of Sirik Port.