Plaut activity based costing: an evaluation of its relevance in multi-product companies

Abstract

This research report is aimed at testing the relevance of Plaut Activity Based Costing, at a time in the international management accounting domain when debates are rife as to the future direction management accounting should take. Relevance was tested using nine parameters. These nine parameters were acquired from contemporary management accounting literature. Questionnaires were sent to a population of Plaut Activity Base Costing users, who had to rate it as an approach to management accounting for its relevance against each parameter. The findings of this research report are that the Plaut Activity Base Costing concept gives a superior degree of relevance. Of specific significance is the highly positive effect it has on the profitability of the companies that employ it. The findings also show that enhanced profitability is the product of the effective addressing of a wide range of issues within an organisation. Plaut Activity Based Costing also tested highly positive on the other eight parameters for relevance. The aim of the research report was achieved, and it can be unequivocally stated that a management accounting method does exist today that ensures relevance to its practitioners.