Analysis of the Prospect of Implementing Activity-Based Costing (ABC) in Governmental Organisations: A Study at the State Treasury Office Jakarta IV

Tri Priyatmo, Rusdi Akbar


This research aims to analyse the prospect of implementing Activity-Based Costing (ABC) at governmental organisations in Indonesia. The study aims to answer two research questions: how can we calculate the unit cost of products using the ABC method in a governmental organisation? (RQ1); and, what is the prospect of implementing ABC in governmental organisations? (RQ2). The study comprises qualitative research undertaken at one governmental organisation, that of the State Treasury Office (KPPN) Jakarta IV. The research reveals that the ABC method can be used to calculate the unit cost of products in KPPN Jakarta IV, and also to obtain a conceptual framework by which it is possible to conclude that the ABC method has a positive outlook as an analytical tool. However, one of the study’s research objects, the prospect of implementing the ABC method in this research, cannot be generalised for all governmental organisations in Indonesia. However, based on the results of this research, it can be stated that there is a shared understanding of the potential for the implementation of the ABC method in the future. This study is the first of its kind to investigate this topic and will yield new insight within the literature on the ABC method in Indonesia.


activity-based costing (ABC); unit cost; prospects; governmental organisation

Full Text:

Download Article


Cai, X., Moore, E., & McNamara, M. (2013). Design an activity-based costing model for a non-admitted prisoner healthcare setting. Australian Health Review, 37(4), 418-422.

Carmo, L. P. F. (2012). Advances and challenges for adoption of Activity Based Costing (ABC) by public sector: A comparative study of Brazil, Colombia, Uruguay and United States. International Business Research, 5(2), 150.

Chea, A. C. (2011). Activity-based costing system in the service sector: A strategic approach for enhancing managerial decision making and competitiveness. International Journal of Business and Management, 6(11), 3-10.

Cokins, C. (2015). A need for better cost information in the public sector. Retrieved May 15, 2018 from

Cokins, C., Helbling, J., & Stratton, A. (1996). Sistem activity-based costing pedoman dasar bagi manajer. Jakarta: PT Pustaka Binaman Pressindo.

Creswell, J. W. (2014). Research design: Qualitative, quantitative, and mixed methods approaches. Los Angeles, London, New Delhi, Singapore: SAGE Publications, Inc.

Datar, S., & Gupta, M. (1994). Aggregation, specification and measurement errors in product costing. The Accounting Review, 69(4), 567-591.

Goldsby, T. J., & Closs, D. J. (2000). Using activity-based costing to reengineer the reverse logistics channel. International Journal of Physical Distribution & Logistics Management, 30(6), 500-514.

Harrison, D. S. (1998). Activity-based costing and warm fuzzies—costing, presentation and framing influences on decision-making~a business optimization simulation~. Dissertation proposal at the faculty of Virginia Polytechnic Institute and State University, The degree of Doctor of Philosophy in Business with a major in Accounting. Retrieved April 30, 2018 from

Hennink, M., Hutter, I., & Bailey, A. (2011). Qualitative research methods. London: SAGE Publications, Inc.

Horngren, C. T., Datar, S. M., Foster, G., Rajan, M., & Ittner, C. (2009). Cost accounting: A managerial emphasis. 13th ed. New Jersey: Pearson Education.

Jones, D. J. (2014). Ripken Products: A case for learning activity-based costing. Journal of Business Case Studies, 10(2).

Kaplan, R. S., & Anderson, S. R. (2004). Time-driven activity-based costing. Harvard Business Review, 82(11), 131-138.

Kaplan, R. S., & Cooper, R. (1998). Cost & effect: Using integrated cost systems to drive profitability and performance. Boston, MA: Harvard Business School Press.

Kont, K-R. (2011). New cost accounting models in measuring of library employees’ performance. Library Management, 33(1/2), 50-65.

Latshaw, C. A., & Cortese-Danile, T. M. (2002). Activity-based costing: Usage and pitfalls. Review of Business, 23(1), 30-32.

Lawson, R. A. (2005). The use of activity-based costing in the healthcare industry: 1994 vs. 2004. Research in Healthcare Financial Management, 10(1), 77-94.

Lutilsky, I. D., & Dragija, M. (2012). Activity based costing as a means to full costing-possibilities and constraints for European universities. Management, 17(1), 33-57.

Mardiasmo (2009). Akuntansi Sektor Publik. Cetakan ke-4. Yogyakarta: ANDI.

Michel, R. G. (2004). Cost analysis and activity-based costing for government. GFOA Budgeting Series Vol. 6.

Morgan, M. J. (1993). Testing activity-based costing relevance: Pharmaceutical Products Limited-case study. Management Decision, 31(3), 8.

Mowen, M. M., Hansen, D. R., & Heitger, L. (2012). Managerial accounting: The cornerstone of business decisions, Fourth ed. International edition. Boston, MA: Cengage Learning, Inc.

Mulyadi (2007). Activity-based cost system. Sistem informasi Biaya untuk Pemberdayaan Karyawan, Pengurangan Biaya, dan Penentuan Secara Akurat Kos Produk dan Jasa (Edisi ke-6 Cetakan ke-2.). Yogyakarta: UPP STIM YKPN.

Oseifuah, E. K. (2013). Activity based costing approach to financial management in the public sector: The South Africa experience. European Scientific Journal, 9(1).

Popesko, B. (2009). How to manage the costs of service departments using Activity-Based Costing. International Review of Business Research Papers, 5(4), 91-101.

Rasiah, D. (2011). Why Activity Based Costing (ABC) is still tagging behind the traditional costing in Malaysia? Journal of Applied Finance and Banking, 1(1), 83-106.

Roztocki, N., Porter, J. D., Thomas, R. M., & LaScola Needy, K. (2004). A procedure for smooth implementation of activity-based costing in small companies. Engineering Management Journal, 16(4), 19-27.

The Global Competitiveness Report 2015-2016. World Economic Forum.

Verbeeten, F. H. M. (2011). Public sector cost management practices in the Netherlands. International Journal of Public Sector Management, 24(6), 492-506.

Vokurka, R. J., & Lummus, R. R. (2001). At what overhead level does activity-based costing pay off? Production and Inventory Management Journal, 42(1), 40.

Weygandt, J. J., Kieso, D. E., & Kell, W. G. (1996). Accounting principles. 4th ed. New York: John Willey & Sons, Inc.

Worldwide Governance Indicators 1996-2016. World Bank.


Republik Indonesia. (2010). Peraturan Pemerintah Nomor 71 Tahun 2010 tentang Standar Akuntansi Pemerintahan.

Kementerian Keuangan. (2015). Peraturan Menteri Keuangan Nomor 65/PMK.02/2015 tentang Standar Biaya Masukan Tahun Anggaran 2016.

Kementerian Keuangan. (2015). Peraturan Menteri Keuangan Nomor 115/PMK.02/2015 tentang Standar Biaya Keluaran Tahun Anggaran 2016.



  • There are currently no refbacks.

Certified Public Accountant (CPA) Test Centre Room
Gedung Ki Bagus Hadikusuma (E4) Lantai 2 Pojok Barat, Universitas Muhammadiyah Yogyakarta,
Jalan Brawijaya (Lingkar Selatan), Tamantirto, Kasihan, Bantul, Daerah Istimewa Yogyakarta, Indonesia
Website: - E-mail:
Phone: +62 274 387 656 (ext: 334)

Journal of Accounting and Investment is licensed under Creative Commons Attribution 4.0 International License.