The Implementation and Benefits of Activity‐Based Costing: A Hong Kong Study

Abstract

Activity‐Based Costing (ABC) is a relatively new accounting system that has received a substantial amount of publicity and is heavily marketed by consulting firms. In light of this, we surveyed companies in 1999 to evaluate the adoption of ABC in Hong Kong. We set out to investigate factors that might lead to its adoption and also surveyed whether companies are satisfied with the new system. Our findings reveal a low adoption rate of ABC. There is directional support for companies with diverse product lines and those facing intense competition using activity‐based costing. Companies that have adopted ABC report high satisfaction with the new system. Overall, activity‐based costing has made limited inroads in Hong Kong. The reasons for this are not readily apparent.

Citation

Chen, G., Firth, M. and Park, K. (2001), "The Implementation and Benefits of Activity‐Based Costing: A Hong Kong Study", Asian Review of Accounting, Vol. 9 No. 2, pp. 23-37. https://doi.org/10.1108/eb060741