Introduction

Healthcare organizations have continued to experience major challenges related to the development of the relevant and accurate cost of information for basing the strategies, pricing and management decisions. In the recent times, many of the healthcare organizations have started investing in sophisticated cost accounting systems such as the activity-based costing (ABC). Generally, activity based costing is a superior cost calculation system that allows resources cost to be allocated to products based on resource consumption (Vogl 2013, pp. 296). Commentators have claimed that ABC system has the capacity of providing great visibility to the healthcare organization’s process and the cost drivers. Hence, the system has the capacity of allowing managers in eliminating costs that are related to the non-value additional activities and improving the level of efficiency to the existing process. Such process is as well referred to as……

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