engleski

Profitability of Banks' Profit Centers with the respect to the applied allocation methods of indirect costs

The main scope of this paper is to define the influence of overhead cost allocation methods on profitability of banks' profit centers. Developed responsibility accounting is a precondition for responsibility center reporting as well as for profitability analysis. The research has been conducted by a questionnaire on the sample of seven banks which represent 68, 23% of total assets of banks in Croatia.This data make this sample relevant. There are numerous advantages of ABC method appliance in comparison with traditional method appliance. That can be an encouragement for the ABC method appliance in banks in which that method is not yet applied. There is a direct connection between ABC method appliance and profit centeers' ROA indicator.

profit centers; indirect cost allocation; traditional method; ABC method; profitability measurement - ROA (return on assets)

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