Management Theory and Studies for Rural Business and Infrastructure Development, Volume 35, Number 3

Manufacturing cost calculation of nursery products with ABC accounting model: a case study

Danutė Zinkevičienė, Monika Stravinskaitė


The paper demonstrates the applicability of ABC accounting system for the calculation of manufacturing costs of nursery production and management's decision making. Posed problem – is there a significant difference between forest seedlings manufacturing cost and cost of sales, calculated using the ABC and traditional cost accounting systems. Theoretical study is based on the analysis of literature of ABC accounting system issues and logical conclusion generation. The theoretical result –  the ABC accounting system model is developed for nursery production manufacturing cost calculation. Based on the random selection of actual nursery‘s information and prepared cost model, nursery activities and activity cost drivers are identified. According to them, costs are distributed to the products and the manufacturing cost and cost of sales of the nursery products are counted. The results allow to assess the need of nursery activities separation and benefit of calculating the manufacturing costs of nursery products by identifying unnecessary activities of individual nursery product groups. This study fulfills the gap regarding to the ABC systems research in the nursery business. Since the study is limited to the analysis of manufacturing process activities, it is proposed to carry out all nursery activities’ evaluation to determine non-value added activities and possible opportunities for cost reduction.

JEL codes: M41, M410.

Keyword(s): activity-based costing, cost accounting, cost

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Management Theory and Studies for Rural Business and Infrastructure Development eISSN 2345-0355

This journal is published under the terms of the Creative Commons Attribution-Noncommercial 3.0 Unported License. Responsible editor: Dr Audrius Gargasas.