Implementation of ABC System : A Case of a Center for Entrepreneurship

The motivation to implement activity-based costing (ABC) in service and academia-oriented institutions are identical to other institutions; to assign indirect costs to products and services based on activities. This study presents and discusses the attempt to develop an ABC stimulation model applicable in an advisory and consultancy unit at Qatar University, the Center for Entrepreneurship (the Center). In order to determine the advantages and limitations of a costing system, both the traditional and ABC methods were compared to analyze and compute the operational costs of the Center that operate in four main activity centers, namely research, training, consultation, and incubation. The study relies on a qualitative research method, including data collected from both primary and secondary sources to accumulate data on the identified issues and then implementing these costing methods to the Center. Secondary data was collected by reviewing literature sources; whereas primary data was based on a survey conducted on approximately 30 staff members of the Center, in the form of close-ended questions. Thus, the findings of the study revealed that ABC is an appropriate and practical tool that allows the management of the Center to gain better insights on their cost elements and efficiently plan the usage of their resources