A Comparative Study of Product Costing by Using Activity-Based Costing (ABC) and Time-Driven Activity-Based Costing (TDABC) Method

2019 ◽  
pp. 171-178
Author(s):  
N. F. Zamrud ◽  
M. Y. Abu ◽  
N. N. N. M. Kamil ◽  
F. L. M. Safeiee
Keyword(s):  
Comparative Study ◽  
Activity Based Costing ◽  
Product Costing

Improving Manufacturing Management with Activity Based Costing

2012 ◽  
Vol 472-475 ◽  
pp. 2494-2501 ◽  
Author(s):  
Michael L. Werner ◽  
Fu Yuan Xu
Keyword(s):  
Financial Reporting ◽  
Cost Savings ◽  
Indirect Costs ◽  
Labor Cost ◽  
Activity Based Costing ◽  
Labor Costs ◽  
Product Cost ◽  
Manufacturing Enterprises ◽  
Product Costing ◽  
Product Costs

The calculation of product cost in modern manufacturing enterprises includes assigning direct costs and indirect costs (overhead) to products. Direct material and direct labor costs can be traced to individual products or batches of products. However, because overhead is an indirect cost and benefits more than one product, it is difficult if not impossible to determine the true overhead cost associated with the overhead resources consumed to manufacture individual products produced. The factory resources included in overhead are an important component of manufacturing product. Overhead costs have traditionally been allocated to products using allocation bases which are correlated to the incurrence of cost such as direct labor hours, direct labor cost, or machine hours using one or few plant-wide allocation base for this purpose. The resulting product costs are used for external financial reporting and are also often used internally as a source of information for management decisions. The information provided by traditional cost systems is often so inaccurate it causes managers to do the wrong things. Further, traditional product costing offers little help to managers in their efforts to reduce costs. Activity based costing is a technique that allocates cost based on activities and volumes that cause cost. The use of these cost causes, called cost drivers, significantly increases product cost accuracy and also encourages managers to take cost-cutting actions that result in true cost savings to the firm. This paper will explore activity based costing and how it can help manufacturers to increase product cost accuracy and to reduce costs.

scholarly journals Analisis Harga Pokok Produksi Dengan Metode Activity Based Costing Untuk Mengambil Keputusan Manajemen Pada Industri Garmen CV. Surya Surabaya

2013 ◽  
Vol 10 (1) ◽  
Author(s):  
Carolina Kumalasari
Keyword(s):  
Production Cost ◽  
Production Control ◽  
Descriptive Analysis ◽  
Analysis Method ◽  
Activity Based Costing ◽  
Research Subjects ◽  
Product Costing ◽  
The Difference ◽  
Abc Method ◽  
The Cost

      This study aims to calculate the cost of goods manufactured baby clothes garment CV Surya Surabaya with the ABC method for reporting purposes and objectives of decision making in gaining competitive advantage . Data analysis method used is descriptive analysis method . The results showed that the conventional cost accounting applied in the enterprise value of the difference of the calculation produces the ABC method. Calculation of costs by activity-based costing method is expected to assist management in making more informed decisions as to be benefit/profit. Data collection methods used in this study is documentation . Research subjects in this study is the production cost of baby clothes in CV Surya Garments Surabaya . The research object in this study is the data associated with the determination of the production cost of baby clothes. The difference between the production cost of conventional methods with activity-based costing method produces values undercosting conditions ( conditions in which a product has a lower cost than the actual cost is absorbed by the product ) and overcosting ( a condition in which a product has a higher cost than  the  cost of which is actually absorbed by the product ). Analysis undertaken in this study members advise the Company to undertake restructuring of the production process and production control for the results of each period more  evenly , because  the  fixed overhead costs is  greater than the variable overhead costs , it is most impact in the calculation of the cost of production.Keywords: Conventional Metode, Activity Based Costing Metode, Product costing

A comparative study on the activity based costing systems: Traditional, fuzzy and Monte Carlo approaches

2015 ◽  
Vol 4 (1) ◽  
pp. 58-67 ◽  
Author(s):  
Hamidreza Esmalifalak ◽  
Matthew S. Albin ◽  
Meysam Behzadpoor
Keyword(s):  
Monte Carlo ◽  
Comparative Study ◽  
Activity Based Costing

scholarly journals A comparative study of activity-based costing system and the traditional system: A case study of Refah Bank

2012 ◽  
Vol 6 (45) ◽  
pp. 11221-11230
Author(s):  
Alinezhad Sarokolaei Mehdi ◽  
Ebrati Mohammadreza ◽  
Taghizadeh Khanghah Vahid ◽  
Ebrati Mina
Keyword(s):  
Comparative Study ◽  
Activity Based Costing ◽  
Traditional System ◽  
System A ◽  
Costing System

Product Costs as Decision Aids: An Analysis of Alternative Approaches (Part 1)

2011 ◽  
Vol 26 (1) ◽  
pp. 1-20 ◽  
Author(s):  
Ramji Balakrishnan ◽  
Eva Labro ◽  
K. Sivaramakrishnan
Keyword(s):  
Decision Aids ◽  
Resource Consumption ◽  
Activity Based Costing ◽  
Numerical Example ◽  
Product Costing ◽  
Multiple Dimensions ◽  
Alternative Approaches ◽  
Product Costs ◽  
Common Platform

SYNOPSIS In this first part of a two-part paper, we develop a common platform to characterize several popular approaches for computing product costs. We describe four kinds of product costing systems: traditional volume-based systems, activity-based costing systems, time-driven activity-based costing systems, and resource consumption accounting. We employ a continuing numerical example to illustrate the commonalities and differences among these systems. In Part 2 of the paper, we evaluate the systems along multiple dimensions and offer suggestions for how we might blend the best features of various approaches.

scholarly journals Costing methods utilization in Czech enterprises.

2013 ◽  
Vol 1 (1) ◽  
Author(s):  
Boris Popesko
Keyword(s):  
Research Methodology ◽  
Basic Research ◽  
Cost Structure ◽  
Final Part ◽  
Activity Based Costing ◽  
System Utilization ◽  
Product Costing ◽  
Different Types ◽  
Costing System ◽  
The Individual

This paper presents the results of the research of the different types of product costing methods utilization in Czech enterprises performed in the years of 2004, 2007 and 2009. Results of individual surveys are compared, in order to prove the expected tendencies of higher usage of modern costing methods such as Activity-Based Costing, in recent years. First part of the paper refers to previous studies of the enterprise cost structure presented by other authors and illustrates the most important reasons of the individual costing system utilization. Following part of the paper defines the basic research methodology and expected limitation of the study. In final part of the paper, results of the survey are introduced and properly discussed.

A Linear Programming Framework for Flexible Budgeting and Its Application to Classroom Teaching

2002 ◽  
Vol 17 (1) ◽  
pp. 69-93 ◽  
Author(s):  
Massood Yahya-Zadeh
Keyword(s):  
Linear Programming ◽  
Variance Analysis ◽  
Theory Of Constraints ◽  
Classroom Teaching ◽  
Activity Based Costing ◽  
Programming Framework ◽  
Product Costing ◽  
Alternative Measures ◽  
The Subject ◽  
Definition Of

Accounting educators and practitioners are well aware of the importance of increased competencies in analytical areas. In response to this need, authors of management accounting textbooks typically offer brief introductions to linear programming (LP), regression analysis, and decision theory. Most textbooks introduce LP in the context of optimal product-mix decisions. However, it is possible to incorporate LP into the discussion of other accounting topics, such as product costing and pricing, and financial and operational budgeting. (For a pioneering article on the subject of integrating activity-based costing and the theory of constraints, see Kee [1995], who applies integer programming to a numerical example in a fashion similar to what is done in this article.) The paper demonstrates a method of incorporating LP into flexible budgeting and variance analysis. By incorporating production and market constraints into budgeting and variance analysis, the proposed method resolves some of the weaknesses of traditional flexible budgeting and offers a framework for integration of marketing and operations factors into accounting procedures. More specifically, the paper offers a revised definition of the flexible budget and a new procedure for determining flexible budget direct cost variances, overhead cost variances, and revenue variances. Further, this paper introduces a method of incorporating variance analysis into the theory of constraints and offers alternative measures of controlling throughput and operating expenses to companies implementing it.

An Activity-Based Costing Method to Support Market-Driven Top-Down Product Family Design

2013 ◽  
Author(s):  
Michael K. Coughlin ◽  
Michael J. Scott
Keyword(s):  
Product Family ◽  
Indirect Costs ◽  
Design Stage ◽  
Accurate Estimation ◽  
Activity Based Costing ◽  
Product Family Design ◽  
Labor Costs ◽  
Top Down ◽  
Product Costing ◽  
Market Driven

As more and more companies offer product families rather than individual products, the competitive advantage of product platforming is shrinking. In order to compete companies need to link marketing and engineering so that designers are able to make decisions about critical trade-offs between cost and performance. The current methods for market-driven platform designs use traditional product costing where indirect costs are assigned to individual products based on relative production quantities. Because of increasing product diversity and decreasing direct labor costs, the ratio of indirect costs to total cost of products is increasing. A method for use during the design stage of top-down product family design is needed to assign indirect costs to individual products based on the product’s consumption of indirect resources. An activity-based costing method for top-down product family design is presented here. This method allows the designer to model indirect costs as a function of engineering attributes, creating a framework for top-down product platform optimization that provides a more accurate estimation of cost than traditional product costing methods. An illustrative example shows that an activity-based costing model predicts different profitability from a traditional costing system for a number of different motor designs.

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