The Role of The Cost Leadership Strategy Using the Activity-Based Cost Accounting (ABC) System in Reducing Costs

This study aims the application of the activity-based cost accounting system (ABC) in cost leadership strategies for economic units. The research challenges companies to adopt the ABC system due to neglecting their role in lowering product costs while maintaining quality for customer satisfaction and high profit. The study used actual cost, semantic, and technical data from the sponge company (Hymen Group) in Duhok Governorate in 2021. The ABC system significantly aided in the success of the cost leadership strategy and reduced costs for the business. The reduction was achieved through accurate non-direct cost allocation and the elimination of non-value-adding activities. The study highlights the close connection between cost reduction and the ABC system-based cost leadership strategy. Recommendations include establishing a separate department for cost accounting, promoting communication and cooperation between private sector businesses and academic institutions, and encouraging industrial company employees to become more cost-conscious by offering specialized scientific and technical courses. Experts advocate applying the ABC system in industrial companies, particularly the sponge company (Hymen Group), as the study's findings demonstrate differences between cost systems in Favor of the ABC system. The ABC system is recommended for use in industrial companies, particularly the sponge company (Hymen Group).