THE ROLE OF COST DETERMINATION BASED ON THE ABC SYSTEM IN MANAGERIAL DECISION-MAKING: A PRACTICAL STUDY IN THE BAGHDAD COMPANY FOR SOFT

Abstract

The research aims to define the importance of the costs system's which based on activities and, its
role in determining and measuring the costs of units and services produced accurately, and that
through a fair distribution of indirect industrial costs and that helping to take right decisions in
management . The research was conducted at the Baghdad Company for Soft Drinks. This research
was based on the hypothesis that (using ABC system achieves equity in allocating indirect costs,
which leads to providing more accurate information about what the traditional system offers about
estimating the potential activity levels and the proposed costs at each level). The researchers used
the descriptive method in the theoretical side and the analysis in the practical side. The research
had a set of recommendations, including the need for economic units to pay attention to apply the
cost system Based on activities, especially the units in which the ratio of indirect industrial costs
is higher than direct industrial costs, taking into consideration the principle of cost and benefit
when choosing the type of system to be applied.