Activity-Based Costing vs Theory of Constraints: An Empirical Study into Their Effect on the Cost Performance of NPD Initiatives


  •  Zu'bi Al-Zu'bi    
  •  Basheer Khamees    

Abstract

The aim of this paper is to provide empirical evidence about the effect of costing technique used by companies on the cost performance of new product development initiatives in industrial companies in Europe. A survey was carried out collecting response from 204 companies in the different consumer product industries to investigate the comparative effect of those two popular techniques. Statistical analyses revealed significant relationship with both ABC and TOC but with a much stronger effect of ABC on the NPD cost performance.



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