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

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.