Simulation study to investigate running cost optimization in Jordan rock wool industries company LTD

Other Title(s)

دراسة محاكاة لتحقيق الإدارة الأمثل للكلفة الجارية في الشركة الأردنية لصناعات الصوف الصخري

Dissertant

Harasis, Ahmad Fayiz Muhammad

Thesis advisor

al-Jabburi, Sallum Ahmad Dawud
Mustafa, Ramadan Jabr

Comitee Members

al-Khatatbeh, Ahmad Ali
al-Azab, Husayn Muhammad

University

Mutah University

Faculty

Faculty of Engineering

Department

Engineering Management Programe

University Country

Jordan

Degree

Master

Degree Date

2011

English Abstract

The cost management process is the most important aspect in industrial plants in order to investigate and achieve the optimum administration of running costs and then to achieve the predetermined organizational goals and objectives.

The traditional cost system has been criticized for cost distortion during the last two decades.

As a consequence, the primary purpose of this study is to select an appropriate manner of cost allocation in industrial companies by introducing and then applying the Activity-Based Costing (ABC) system, by using the actual cost drivers, which helps in the decision-making process.

The present work has implemented the ABC system in Jordan Rock Wool Industries Co.

as a case study through the theoretical and field studies.

The study concluded that the traditional cost method just provides the financial information about the costs, which may be inaccurate.

On the contrary, the ABC system provides accurate financial and non-financial information about the activities in the company.

The study also shows that the cost of some products such as quilted mattress were very high due to the cost distortion in the traditional system.

On the other hand, the cost of this product has been decreased when applying the ABC system due to the actual allocation of the costs, as well as the difference in costs between the two systems has clearly reflected on the financial statements in particular on the income statement where the net profit has increased from 134,909 JD to 157,133.88 JD with 16.47 % when the ABC system has been applied.

Recommended by the study to have knowledge and apply of ABC system in all companies particularly the lagged company.

JRWIC has to adopt the study and implementation of this system in order to ultimately meet the predetermined organizational goals of the company.

Main Subjects

Business Administration

Topics

• Cost accounting
• Costs
• Managerial accounting
• Jordan
• Industrial costs
• Mineral wool

No. of Pages

92

Table of Contents

• APA
• MLA
• AMA

Language

English

Data Type

Arab Theses

Record ID

BIM-303796