DRIVING ORGANISATIONAL COST EFFICIENCY THROUGH THE IMPLEMENTATION OF ACTIVITY-BASED BUDGETING (ABB) MECHANISM (A THEORETICAL STUDIES)

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MUNIRU HARUNA ACA, ACTI, CPFA , ZAYYANU YAHAYA KWANGA

Abstract

The paper titled “Driving Organizational Cost Efficiency Through the Implementation of Activity-Based Budgeting (ABB) Mechanism” examines quantitatively, the appropriate approach available for use in analyzing the role of cost effective technique in the preparation of organizational budget. By utilizing an illustration to hypothesize the budgeting process in a manufacturing organization, the study considers the benefits, potential, and challenges connected with the application of this strategy. Activity Based Budgeting technique is use in the management, coordination and harmonization of a corporate organization. The paper discovered that with a successful implementation of Activity Based Budgeting system by an organization, the information and data gathered by management accountants might be used to analyze trends, for estimating and modelling consistent with scenarios such as “What if...analysis?” By estimating the quantities and volumes on an outlined organizational period, information concerning all cost objects, cost inductors, necessary amounts and therefore the level of resources costs are often obtained by the organization that will aid management in their cost control. The methodology applied is a quantitative approach of secondary data justified by a simple percentage of trend analysis, ANOVA and Regression Coefficient Analysis. The article is both theoretical and practical in nature. It offers a critical review of the chances of implementing new budgeting trends from a theoretical standpoint. From a practical standpoint, it has the potential to broaden managers' awareness of a handful of novel budgeting approaches. The paper concluded that the adoption of Activity Based Costing significantly improve the cost efficiency of corporate entities in Nigeria.

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