A Case Study of Activity Based Costing Essay
SCHOOL OF POSTGRADUATE STUDIES,
FACULTY OF SOCIAL SCIENCES
A case study of Activity Based Costing in Lagos State Healthcare
POPOOLA, OLUWATOYIN MUSEDIKU JOHNSON
Course Facilitator: Professor Kabiru Isa Dandago
Being a paper presented in the M.Sc. Accounting Programme,
Department of Accounting, Bayero University, Kano-Nigeria
December 15, 2009
The purpose of this study is to examine the healthcare systems, in particular the blood transfusion services in Lagos State Health Services. The study revealed the challenges, the pitfalls and other associated problems of adopting a costing technology which significantly departs from previous practices.
The research was based on a …show more content…
In line with this thought, management's focus on cost reduction and tighter cost control had become an important issue. Several researchers have addressed this issue by looking at costs for specific processes (Sonnenberg et al., 1999; Strauss, 2001; Amin et al., 2003) or by surveying the costs incurred by the transfusion system (Varney & Guest, 2003; Syrjala et al., 2001). This paper sits between these two strands by looking at the experience of a healthcare organization which has undertaken an overall project for implementing an innovative costing technique – activity based costing – for the whole institution.
2.0 Literature Review
2.1 Activity Based Costing: Conceptual framework
ABC assigns manufacturing overhead costs to products in a more logical manner than the traditional approach of simply allocating costs on single volume measures such as direct labour hours, direct labour costs, or machine hours. Furthermore, ABC has grown in importance in recent times because manufacturing overhead costs have increased