The Role of the Activity-Based Budgeting Approach in Preparing Planning Budgets and Costs Control: An Applied Study in SDI Company


  • Nuha Safi Abd Northern Technical University - Technical Institute Al-Dour


Budgets, Activity-Based Budgeting, Planning Budgets, Industrial Sector, SDI


The research aims to encourage the industrial sector to use modern costing methods as an activity-based budgeting approach, and the mechanism for using this approach in preparing planning budgets. In order for the industrial sector to be able to provide more accurate information on the activities cost it provides. As well as, tightening control over activities through Activity-based planning budgets. All this contributes to improving the services of this sector and reducing its costs. The researcher sought to achieve this goal by designing planning budgets based on activities in "The State Company for Drugs Industry and Medical Appliances/Samarra" (SDI Company) based on the financial reports and official records of the company collected as well as field visits and personal interviews with a number of officials in the management of this company.

The research also aims to demonstrate the importance of preparing budgets based on the activities that contribute to the planning and cost control process, as well as the extent of this company's commitment to the participation of all departments in preparing budgets. The research concluded that the preparation of planning budgets in the industrial sector in general and in SDI Company contributes to determining and limiting costs and preparing the budget for each activity. In addition, the detailed and analytical financial information provided by Activity-based budgeting about the activities contributes to imposing more accurate and better control over the cost. Moreover, this information facilitates the process of applying the activity-based budgeting system, because it is a planning and control tool that contributes to reducing costs.


Download data is not yet available.


Abdulaal, M. A. A. (2013). Achieving integration between activity-based budgeting and beyond budgeting approaches with the aim of increasing the effectiveness of performance management systems: an applied study. Master's thesis, College of Commerce, Cairo University, Egypt.

Al-Afandi, S. M. (2003). The extent of the use of planning budgets as a tool for control and evaluation of performance in public sector establishments. Master's Thesis, University of Aleppo, Syria.

Al-Dhahabi, Jalila Idan and Al-Qusous, Moab Guide (2009). The impact of budgeting based on activities in implementing competitive strategies: an applied study in the General Company for Electrical Industries - Tammuz Laboratory. Journal of Economics and Administrative Sciences, University of Baghdad, Volume 15, Issue 55, Pages 211-229.

Al-Hubaiti, Q. M. (2002). Using an Activity-based costing (ABC) approach to determine the cost of services in health institutions: Case study Princess (Z) in Jordan, Tanmiyat Al-Rafidain Journal, 24 (70), 279-294.

Al-Janabi, A. N. B. (2017). The basis of accrual accounting and its role in preparing and setting priorities for the planning budget for local governments: an applied study in Al-Qadisiyah Governorate. Scientific Journal of Business and Environmental Studies, 8(4), 28-53.

Al-Mahaina, B. K. (2022). Planning budgets: their concept, objectives, and how to prepare them. Arab Journal for Scientific Publishing, Issue (47), 243-261.

Al-Masoudi, H. A. J. & Rasheed, S. A. (2021). The role of activity-based budgeting in achieving the strategic objectives of economic units. Warith Scientific Journal, 3(5), 234-264.

AL-Zubaidi, A. G. M. (2023). Using the activity-based budget (ABB) in implementing the cost leadership strategy and improving profitability: applied study in Al-diwaniyah tire factory. World Economics and Finance Bulletin, 19, 39-46.‏

Antos, J. & Brimson, J. A. (2009). Activity Based Management, Activity Based Costing, Activity Based Budgeting. Willy. Value creation Group Inc, Dec 2009.

Awadullah, A. H. A. & Abdulqadir, A. H. (2020). The importance extent of the use of planning budgets in planning, control, and improving performance in Sudanese industrial companies. International Journal of Scientific Studies Publishing, 5(3), 251-274.

Banovic D., (2005). Evolution and Critical Evaluation of Current Budgeting Practices. Master's Thesis, Faculty of Economics, University of Ljubljana, Ljubljana.

Blocher, E. J., Stout, D. E., & Cokins, G. (2010). Cost Management: A Strategic Emphasis. 5th ed. McGraw-Hill Education, New York.‏

Farhat, M. K. & Yassin, A. M. (2017). The Possibility Of Applying The Budget System Based On Activities In Banks - Field Study On Private Banks Listed On The Damascus Stock Exchange. Tishreen University Journal for Research and Scientific Studies, Economic and Legal Sciences Series, 39(4), 91-110.

Huynh, T., Gong, G., & Huynh, H. (2013). Integration of activity-based budgeting and activity-based management. International Journal of Economics, Finance and Management Sciences, 1(4), 181-187.‏

Janíková, D. (2011). Draving up a budget using the Activity Based Budgeting methodology through the simulation of processes. Quality Innovation Prosperity, 15(2), 18-30.

Kaplan, R. S. & Cooper, R. (1998). Cost & Effect: Using Integrated Cost Systems to Drive Profitability and Performance. Harvard Business School Press, Boston.

Keller, I. W. & Ferrara, W. L. (1966). Management Accounting for Profit Control. McGraw-Hill, New York.

Khalil, K. A. Y., Al-Shafie, K. A. A., Al-Basheer, M. A. E. (2018). The extent of the possibility of applying the activity-based budgeting system: a field study on industrial companies operating in the White Nile State. Scientific Journal of University of El Imam EL Mahdi, No. (11), 117-152.

Mabberley, J. (2004). Activity-Based Costing in Financial Institutions. Translation: Prof. Dr. Ahmed Muhammad Zamil, Research Center Publications, Institute of Public Administration, Saudi Arabia.

Rasheed, S. A. (2020). Integration between zero-based budgeting and activity-based budgeting and its impact on achieving the strategic objectives of economic units (Suggested Framework), Master’s thesis, College of Administration and Economics, University of Karbala, Iraq.

SDI Company (2023). Financial report of SDI Company for the year 2022, Samarra, Iraq.




How to Cite

Nuha Safi Abd. (2023). The Role of the Activity-Based Budgeting Approach in Preparing Planning Budgets and Costs Control: An Applied Study in SDI Company. American Journal of Economics and Business Management, 6(9), 48–60. Retrieved from