Resource consumption accounting (RCA)‎ : the challenges and application obstacles in the Egyptian automotive industry

الملخص EN

The field of management accounting is experiencing a punctuated modification toward more advanced methods and practices.

RCA is an advanced approach to management accounting which emphasizes on managers as the most important users of the information and provides the best knowledge comparing to traditional management accounting.

RCA is described as a system of managerial accounting, which classifies costs as fixed and variable and supports the process of decision making through defining precisely the idle capacity.

Besides, RCA combines two costing approaches; activity based costing (ABC) and German cost accounting method known as GPK.

The fundamental purpose of this research paper is to point out the possibility of adopting and applying RCA, explain the concepts of RCA, its components and distinguishing features, and identify the challenges and application troubles of this approach in the Egyptian business environment.

The main findings of this study are: RCA – to a large extent - is a new technique in the Egyptian business environment and it needs an accurate database to identify the various resources of the company and emphasis on causal relationships between the company's resources and outputs, (2) RCA requires support from top management because any new concept cannot be adopted or applied without top management support physically and financially, and (3) RCA requires revising the organizational values in a company where there is a tendency to resistance that may be attributed to a lack of knowledge of the rules and application policies or fear from the failure in adopting and applying the new practices of management accounting