A Review of ABC Methodology for Agricultural Sector.

This study examines recent advances in cost accounting methods with special reference to the application of Activity Based Costing methodology in primary sector. Large scale agricultural enterprises that depend heavily on capital investments require rational allocation of the available resources and efficient utilization of the existing production technology. The accurate and reliable computation of cost per unit of product is crucial for the evaluation of the economic performance of the enterprises and the investigation of the optimal allocation of the production factors in different activities. The concept of Activity Based Costing methodology, which is of great importance in the system of cost accounting, allows the allocation of indirect costs to specific activities and individual products, overcoming the drawbacks of the traditional method of cost accounting. A synopsis of the Activity Based Costing method is described, followed by a review of recent cost accounting applications to agricultural systems.