Cost based Performance Focused Activity Based Costing and its role in performance evaluation: an applied study in the leather factory/advanced civil shoe factory No.7

Abstract

The research aims to explain the role of the Performance Focused Activity Based Costing (PFABC) system in measuring and evaluating the performance of economic entity activities in a clear and comprehensive manner, and thus improving the efficiency and effectiveness of the performance of the economic unit as a whole. The system was implemented with its nine steps according to the model (Namazi) to demonstrate this role in one of the Iraqi public sector companies, Leather Factory / Advanced Civil Shoe Factory No. 7, which is one of the factories of the General Company for Textile and Leather Industries. The researchers are used the data of Leather Factory/Advanced Civil Shoe Factory No.7 for 2018 obtained by field visits . A set of conclusions are reached, the most important of which is that the PFABC system is an important monitoring tool that contributes greatly to the process of evaluating the performance of economic unit activities by identifying strengths and weaknesses in the performance of each activity and the productivity of each activity. Thus providing necessary information to manage the economic unit to take the necessary decisions to correct the path and follow up the implementation of these decisions to achieve the highest level of efficiency and effectiveness and thus improve competitiveness and stay in the market. A set of recommendations, the most important of which is that the leather factory needs to make the process of evaluating the performance of its activities periodically through relying on modern tools, such as the PFABC system, to evaluate the performance of the activities of economic units in order to identify strengths and work to support them and weaknesses and work to address them.