The Small-Medium Enterprises’ Responsibilities and Activity Based Costing (ABC) or Traditional Cost

Running Head: THE SMALL-MEDIUM ENTERPRISES’ RESPONSIBILITIES AND
ACTIVITY BASED COSTING (ABC) OR TRADITIONAL COST 1
The Small-Medium Enterprises’ Responsibilities and Activity Based Costing (ABC) or
Traditional Cost
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THE SMALL-MEDIUM ENTERPRISES’ RESPONSIBILITIES AND ACTIVITY BASED
COSTING (ABC) OR TRADITIONAL COST 2
Abstract
For an extended period, activity-based costing has enabled several organizations to be
capable of identifying the actual charges of different products along with processes. The idea has
allowed management of small-medium enterprises to be capable of making sound decisions that
relate to the profitability along with expenses of various products that they produce. The
administration has also remained to be capable of concentrating on productive activities that
improve different processes of business operations and manufacturing essential products in the
international marketplaces. Ideas presented on this research paperwork examines distinct
advantages of activity-based costing versus systems of traditional costing while offering
arguments for the potential benefits to the operations of millions of small to medium business
(SMEs) around the world from implementing ABC. This paper examines issues that relate to the
implementation of activity-based costing within business operations of the small medium
enterprises. Besides, this paper explores a framework for activity-based costing deployments in
different small medium enterprises. The presented framework for ABC in small medium
enterprise focus on illustrating different variables that can show various variables that can
influence implementation process of ABC. These variables discussed in this paper remains to be
the characteristics of SME along with implementation challenges of ABC within the business
operation. The conclusion of this research h work concentrate on the implementation of
outcomes of the implementation process of ABC within operations of the small-medium
enterprise.
Introduction

THE SMALL-MEDIUM ENTERPRISES’ RESPONSIBILITIES AND ACTIVITY BASED
COSTING (ABC) OR TRADITIONAL COST 3
For the past decades, activity-based costing (ABC) has enabled operations of different
organizations in the free marketplace around the international places to identify the actual
charges of processes along with products. The idea helps most companies within the markets to
arrive at sound decisions that relate to the profitability along with expenses of the different
products that they produce (Berry, 2014). It also allows the companies to achieve the
effectiveness of their process that deals with business operations together with manufacturing of
essential commodities for their consumers. According to Dwivedi & Chakraborty (2017)
activity-based costing has been the vital factor in enabling various small medium enterprises and
other big companies to achieve as well as maintain competitiveness in the international markets
of the current century. Furthermore, activity-based costing has received successful
implementation in different firms and presently investigators are presently finding that the focus
on ABC can be essential in the creation of a competitive edge in various enterprises that range
from small to medium that in turn represent close to ninety-seven percent of all permanent, full-
time employment opportunities (Palaiologk et al., 2012). Therefore, the objective of this
research proposal is to examine the Small-Medium Enterprises’ Responsibilities and Activity
Based Costing (ABC) or Traditional Cost Accounting. Ideas presented in this article discuss
issues that relate to the implementation of activity-based costing within business operations of
the small medium enterprises.
The ideas on this research paper concentrate on the potential for small, medium
enterprises to develop in revenue as well as competitiveness by adopting activity-based costing.
The ideas presented on this paper begin by the process of describing the importance of small
medium enterprises that refer to the civil society builders in the world by the European

THE SMALL-MEDIUM ENTERPRISES’ RESPONSIBILITIES AND ACTIVITY BASED
COSTING (ABC) OR TRADITIONAL COST 4
Parliament in economies of free markets and the crucial vital of supporting their development
(Dwivedi & Chakraborty, 2017). Activity-based costing remains to be the means for different
small medium enterprises to attain cost savings along with transparency in their operations that
can assist them in achieving competitiveness in the international markets.
Aim of research
The principal focus of this investigative paperwork is to examine the Small-Medium
Enterprises’ Responsibilities and Activity Based Costing (ABC) or Traditional Cost Accounting
(Seto et al., 2012). . The paper aims at the examination of different issues that relate to the
implementation of activity-based costing within business operations of the small medium
enterprises.
Objectives of research
1. To analyze the effectiveness of using traditional cost accounting (TCA) in SMEs
2. To investigate effectiveness of using accounting based on activity (ABC) within
SMEs
3. To assess benefits of using accounting based on activity (ABC) within SMEs
4. To assess the limitation of using activity-based accounting (ABC) in SMEs
5. To recommend various strategies for minimizing limitation of using activity- based
accounting (ABC) in SMEs
Literature Review