THE IMPACT OF ABC (ACTIVITY BASED COSTING) ON MANUFACTURING FIRM PERFORMANCE IN VIETNAM

Abstract

In this study, Based on the data from a large sample amount of Vietnam manufacturing plants and some research models, I want to demonstrate the impact of Activity-based costing (ABC) on manufacturing performance, especially is the plant performance regarded as operational performance rather than financial performance, is directly by the World-class manufacturing (WCM) practices adoption. From the result of sample research, I can conclude that ABC has no significant or very little direct effect on performance of plant that is represented by the improvement of manufacturing cost, cycle time and the quality of product. However, WCM present as a mediator that helps to explore the impact of ABC on plant performance clearly. By using results and methods of many other researchers, I evaluate the relationship between ABC implementation, WCM adoption and plant performance. From this evaluation, I can see that ABC can’t improve performance of plant by itself, and one of the ways to see overall impact of ABC is the implementation of WCM.