The effect of firm's size on the adoption and implementation of activity based costing

In the present era of cut-throught competition an organization can increase their profits by reducing the cost only. Activity based costing is a tool in the hands of management to get the more accurate cost data. On the basis of which the management can take more correct decisions. Previous studies show that the developed countries are using ABC system more as compare to the developing countries. In the present study there is an attempt to know that whether the size of the organization is having any significant impact on the implementation of ABC system in the selected manufacturing units. The size of the organization is measured through the No. of employees in the organization as used by most of the studies. Logistic regression model is used to know the above relation and found that there is a significant impact of the size of the organization on the implementation of the ABC system. It is recommended future study can be done to investigate the other various influential factors for the implementation of ABC system such as, product diversity, top management support, competition level etc.