PERFORMANCE FOCUSED ACTIVITY BASED COSTING (PFABC) AS A MANAGEMENT CONTROL TOOL

Abstract

This paper offers a systematic review of the literature on performance-focused activity-based costing (PFABC) as an instrument of management control. Rather than treating PFABC as a purely technical costing procedure, the review approaches it as a managerial mechanism that links the causal logic of cost formation to a structured system of standards and variance analysis. Drawing on a thematic synthesis, the paper maps five main lines of inquiry: (1) the evolution from ABC to TDABC and, subsequently, to PFABC; (2) the use of PFABC as a control loop built around variance diagnostics and the allocation of responsibility; (3) reported implications for managerial decision-making and the conditions under which PFABC can be effectively applied; (4) methodological limitations and organizational barriers to implementation; and (5) emerging directions for further development, including criteria for assessing driver quality, the digitalization of monitoring processes, and integration with controlling and activity-based budgeting. The paper concludes by presenting a conceptual framework for understanding how PFABC may enhance the quality of management control and by outlining priorities for future research.