Contribution of Activity Based Costing: A Case Study of Tunisian Company ‘CPG Gafsa’

Abstract

The purpose of this article is to show how the ABC method is more relevant than the traditional methods of calculation of the costs. We conducted a case study of the ‘Gafsa phosphate company’ as it is the operator of sector-based phosphate which occupies a place of extreme importance in the strategy of economic development in Tunisia. Empirical results gave a clarification on the reliability and relevance of the ABC method compared to the conventional methods of calculating cost of returns. On the other hand they highlighted the formal applicability of this innovative method and maintained the full cost method as a reference in the strategic decision making. Our research restricts the generalization, as the case of the Gafsa phosphate company cannot be invoked to represent all Tunisian companies. Also results are restricted to financial role of ABC approach. In a positive sense, our research provides an overview on the integration of the accounting practices of innovative management within developing countries