The Usefulness of Activity Based Costing and Traditional Costing in Banking Industry: Evidence from a Bank in Iran

In this study the results of implementation of two costing systems are illustrated. These systems are Activity Based Costing (ABC) and Traditional Costing. In order to analyze the cost structure for the bank services, an Iranian bank (Mehr bank) is chosen as a sample. After explaining the calculation methods of unit costs of the systems, astatistical pair-wise comparison is done to find the probably usefulness ofthe information. The results show that there is no difference between the unit costs of two systems. Therefore it suggests doing more research to explain the reasons of insignificant differences between ABC and traditional systems

Keywords:

Activity Based Costing , Traditional Costing , Mehr Bank