Background of the Study
Agriculture is a critical economic activity in Mayo-Belwa Local Government Area (LGA), contributing to food production, employment, and income generation for many households. Despite its importance, agricultural enterprises in this region face several challenges in managing their costs effectively. Activity-Based Costing (ABC) is a more refined cost allocation method that assigns overhead costs to activities and subsequently to products, making it more accurate than traditional costing methods (Kaplan & Anderson, 2004). ABC allows agricultural enterprises to better understand the true cost of production, identify inefficiencies, and improve resource allocation. However, the implementation of ABC is often challenging, especially in small-scale agricultural enterprises in rural settings like Mayo-Belwa.
This study aims to examine the challenges faced by agricultural enterprises in Mayo-Belwa LGA when attempting to implement ABC and assess the benefits of its application in cost management.
Statement of the Problem
Agricultural enterprises in Mayo-Belwa LGA often face difficulties in adopting sophisticated costing methods such as Activity-Based Costing. These challenges arise from limited awareness, lack of skilled personnel, and inadequate infrastructure. As a result, enterprises struggle with cost inefficiency, leading to poor profitability and reduced sustainability. This study seeks to explore the barriers to the effective implementation of ABC in agricultural enterprises in Mayo-Belwa LGA.
Aim and Objectives of the Study
The aim of this study is to investigate the challenges of implementing Activity-Based Costing in agricultural enterprises in Mayo-Belwa LGA.
The objectives are:
Research Questions
Research Hypotheses
Significance of the Study
The study will contribute to a better understanding of the benefits and challenges of Activity-Based Costing for agricultural enterprises in Mayo-Belwa LGA. It will provide insights for policymakers, agricultural businesses, and practitioners to improve cost management practices and enhance the competitiveness of the agricultural sector.
Scope and Limitation of the Study
The study will focus on agricultural enterprises in Mayo-Belwa LGA, specifically those that are attempting to implement or have attempted to implement Activity-Based Costing. Limitations include the potential unavailability of financial data and reluctance to share cost-related information by business owners.
Definition of Terms
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