THE ROLE OF COSTING TECHNIQUES IN REDUCTION OF COST AND ACHIEVING COMPETITIVE ADVANTAGE IN IRAQI FINANCIAL INSTITUTIONS

Abstract

Achieving a competitive edge is essential for the success of an institution, and this may be accomplished by utilizing various costing approaches and reducing production costs. This situation deserves the attention of academics. The current study explores the effect of costing methods such as absorption costing and marginal costing on the accomplishment of competitive advantage by Iraqi financial institutions. The research also examines the function of cost reduction as a mediator between absorption costing, marginal costing, and the development of competitive advantage by Iraqi financial institutions. Survey questions were utilized to collect primary data from the selected respondents. The research also employed PLS-SEM using smart-PLS to examine the correlations between the variables under investigation. Absorption and marginal costing were found to have a good relationship with Iraqi financial institutions' accomplishment of competitive advantage. The results also revealed that cost reduction considerably mediates the relationship between absorption costing, marginal costing, and the realization of competitive advantage by Iraqi financial institutions. Utilizing absorption and marginal costing, the research assists policymakers in formulating cost-reduction and competitive advantage-related policies.