A costing system for the construction industry in Southern Africa
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Authors
Mushonga, Evans
Issue Date
2015-03
Type
Dissertation
Language
en
Keywords
Traditional costing , Activity-based costing , Construction industry
Alternative Title
Abstract
This research is based on the problem of allocating indirect overheads to construction projects in order to establish the performance of each project. Traditional costing (TC) systems and Activity-Based Costing (ABC) systems are both used for the allocation of overheads.
Both primary and secondary data were used in this research. Primary data was collected by means of two questionnaires, one addressed to construction companies and the other to consultants. The sample of respondents was obtained from the register of contractors and construction industry companies. The researcher sent the links to the Lime survey by email to all respondents.
The purpose of the literature review was to identify gaps and justify the need for this research. It considered existing findings by previous researchers. Primary data was therefore required to find answers specific to the problem of overheads allocation in the construction industry. According to the respondents, the use of TC systems produces distorted project cost results while ABC produces more accurate results when used in the construction industry. However, contractors had not adopted the ABC system but used TC systems despite their producing distorted project costs.
It is recommended that both TC and ABC systems be used in the construction industry since they complement each other. Contractors may have to adopt the ABC system to enhance their decision-making while continuing to use the TC systems for external reporting.
Description
Citation
Mushonga, Evans (2015) A costing system for the construction industry in Southern Africa, University of South Africa, Pretoria, <http://hdl.handle.net/10500/19155>