Skip to the content

An application of the activity-based costing for the management of project overheads to increase profit during the construction stage

Jaya, NM, Pathirage, CP and Sutrisna, M 2010, An application of the activity-based costing for the management of project overheads to increase profit during the construction stage , in: SPARC 2010 Conference, 10-11 June 2010, Mary Seacole, the University of Salford, United Kingdom. (Submitted)

Full text not available from this repository. (Request a copy)

Abstract

The traditional costing system was originally developed in England when industrial engineers and cost accountants applied a primary concept of cost accounting systems to minimise the risk of bankruptcy during times of recession. The conventional Bills of Quantities (BoQ) arbitrarily distributed average overheads to the real jobs or projects on a direct labour basis. There would seem to be an invisible cost-causal relationship between overheads and activities. Project overheads are indirect costs that are not necessarily defined in close relation to the activities. The Activity-Based Costing (ABC) system enables it to assign costs to every activity, then to jobs or projects. This paper aims to investigate an application of the ABC system for the management of project overheads to increase profit during construction operations and to develop a cost controlling concept, through a thorough review of literature and a critical discussion. The ABC system provides diverse cost drivers in assigning accurately the project overheads to every activity and demonstrates clear insights of cost cause-and-effect relationships to the jobs or project packages. The ABC system would, therefore, be implemented suitably to develop an Activity-Based Cost Controlling (ABCC) model for the management of project overheads, and as a cost controlling tool and technique to increase profit during the construction stage in the construction industry.

Item Type: Conference or Workshop Item (Paper)
Uncontrolled Keywords: activity-based costing, project overheads, cost controlling, profit, construction stage.
Themes: Subjects / Themes > H Social Sciences
Subjects outside of the University Themes
Schools: Colleges and Schools > College of Science & Technology
Colleges and Schools > College of Science & Technology > School of the Built Environment
Colleges and Schools > College of Science & Technology > School of the Built Environment > Centre for Disaster Resilience
Colleges and Schools > College of Science & Technology > School of the Built Environment > Management in Construction Research Centre (MIC)
Refereed: Yes
Depositing User: Nyoman M Jaya
Date Deposited: 14 Dec 2010 10:19
Last Modified: 20 Aug 2013 17:43
URI: http://usir.salford.ac.uk/id/eprint/12541

Actions (login required)

Edit record (repository staff only)

No Altmetrics available