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Based on the above survey findings, discuss the issues, challenges and solutions in relation to the implementation of Activity-Based Costing by the companies. THE SURVEY

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Based on the above survey findings, discuss the issues, challenges and solutions in relation to the implementation of Activity-Based Costing by the companies.

THE SURVEY SAYS ... Professors John Innes, Falconer Mitchell, and Donald Sinclair have conducted two surveys designed to study ABC adoption trends within the United Kingdom across a five-year time span. The profes- sors' initial survey results are based on responses from 352 of the U.K.'s largest companies, while the follow-up survey results obtained five years later are based on responses from 177 of the U.K.'s largest companies. The initial survey results indicated that 21% of respondents were currently using ABC, 29.6% were considering ABC adoption, 13.3% had rejected ABC after considering its implementation, and 36.1% were not considering ABC. Five years later the follow-up survey showed that 17.5% of re- spondents were currently using ABC, 20.3% were considering ABC adoption, 15.3% had rejected ABC after considering implementation, and 46.9% were not considering ABC. The professors summarized their findings by saying These results are indicative of no growth in the popularity of ABC, and are consistent with both a leveling off in interest in it and the adoption of it over this five- year period." Source: John Innes, Falconer Mitchell, and Donald Sinclair, Activity-Based Costing in the U.K.'s Largest Compa- nies: A Comparison of 1994 and 1999 Survey Results," Management Accounting Research, September 2000, pp. 349-362

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