Dissertation Report: Activity-Based Costing and Performance

This dissertation investigates the impact of activity-based costing (ABC) on organizational performance, utilizing contingency theory as a framework. The study aims to determine if ABC improves performance, measured by market price, EPS, and asset turnover. While management accounting practices significantly predict organizational performance, the results show that non-ABC organizations have higher market prices and EPS, while ABC organizations have higher asset turnover. The findings indicate no significant differences in operating performance when using either ABC or non-ABC practices with a low-cost strategy, or when ABC organizations use strategies other than low-cost. The research concludes that the success of ABC implementation depends on how well it aligns with an organization's strategies, structures, and business environment.