Current value accounting

Activity-based Costing (ABC) and Activitybased Management (ABM)
Implementation – Is This the Solution for
Organizations to Gain Profitability?
Authors*:
Ildikó Réka CARDOŞ,
Ştefan PETE

A

bstract. Adherents of ABC/ABM systems claimed traditional management accounting systems generated misleading costs in a contemporary, tumultuous, often changing business environment and implementing
ABC/ABM would remedy this. That is why activity-based costing (ABC) and activity-based management (ABM) represents the symbol of improved competitiveness and efficiency in every organization.
The purpose of this article – after analyzing the existing literature in the field – is to emphasize that new cost systems such as ABC and ABM could be a strong couple that assures competitiveness and efficiency for each company. Another objective is to present that, besides its disadvantages, firms implement the
ABC/ABM system because it permits better tracing of costs to objects, superior allocation of overheads to cost objects, financial and non-financial analysis and measures useful to managers and management accountants in the decisionmaking process.
Keywords: ABC, ABM, implementation process, profitability
JEL Classification: M41, M10, M49
* Asist.univ.dr.Ildikó Réka Cardoş, Babeş-Bolyai University, Faculty of Economics and
Business Administration, Cluj-Napoca, e-mail: [e-mail]; Conf.univ.dr.Ştefan
Pete, Babeş-Bolyai University, Faculty of Economics and Business Administration, ClujNapoca, e-mail: [e-mail].

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Ildikó Réka CARDOŞ, Ştefan PETE

Introduction
Changes in the business environment, triggered by global competition and technological innovation, have led to innovations in the use of financial and nonfinancial information in organizations. The new environment demands relevant information and data about costs and performance within the organization’s activities, processes, products, services and customers.
Usually,

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