Improving activity-based costing heuristics by higher-level cost drivers

2004 ◽  
Vol 157 (2) ◽  
pp. 332-343 ◽  
Author(s):  
Carsten Homburg
Keyword(s):  
Activity Based Costing ◽  
Cost Drivers

scholarly journals Time-driven activity-based costing of total knee replacements in Karachi, Pakistan

BMJ Open ◽  
2019 ◽  
Vol 9 (5) ◽  
pp. e025258
Author(s):  
Rabia Mansoor Khan ◽  
Katherine Albutt ◽  
Muhammad Abdullah Qureshi ◽  
Zara Ansari ◽  
Gustaf Drevin ◽  
...  
Keyword(s):  
Process Improvement ◽  
Indirect Costs ◽  
Osteoarthritis Of The Knee ◽  
Activity Based Costing ◽  
Process Maps ◽  
Cost Drivers ◽  
Personnel Costs ◽  
Total Knee Replacements ◽  
Institutional Cost ◽  
Total Knee

IntroductionOsteoarthritis of the knee has been identified as the most common disability in Pakistan. Total knee replacement (TKR) surgery is the curative treatment for advanced osteoarthritis of the knee; however, cost remains one of the barriers to effective and timely service delivery.ObjectiveWe conducted a time-driven activity-based costing (TDABC) analysis of TKR to identify major cost drivers and areas for process improvement.Methods and analysisWe performed a prospective TDABC analysis of patients who underwent bilateral TKR at The Indus Hospital (TIH) during a 14-month period from October 2015 to December 2016. Detailed process maps were developed for each phase of the care cycle. Time durations and costs were allocated to each resource utilised and aggregated across the care cycle, including personnel, direct and indirect costs.ResultsWe identified seven care phases for a complete TKR care cycle and created their detailed process maps. Major time contributors were ward stay and discharge (20 160 min), TKR surgery (563 min) and surgical admission (333 min). Overall, 92.10% of time is spent during the ward stay and discharge phase of care. Patients remain hospitalised for an average of 14 days postoperatively. Overall institutional cost of a TKR at TIH was US$4360.51 (Pakistani rupees 456 981.17) per bilateral TKR surgery. The overall primary cost drivers for the full bundle of care were consumables used during TKR surgery itself, consumables utilised in the wards and personnel costs contributing 57.64%, 27.45% and 12.03% of total costs, respectively.ConclusionUtilising TDABC allowed us to obtain a granular analysis of time and cost that was subsequently used to inform quality process improvement initiatives. In low-resource settings, such as Pakistan, TDABC has the potential to be a useful tool to guide resource allocation and process improvement.

scholarly journals A Practical Application Of Multiple Activity Based Costing

2011 ◽  
Vol 8 (2) ◽  
pp. 56
Author(s):  
Ronald A. Milne ◽  
Frances E. Milne
Keyword(s):  
Activity Based Costing ◽  
Practical Application ◽  
Overhead Cost ◽  
Cost Drivers

Professors Cooper and Kaplan (1988a and 1988b) recommend the allocation of overhead based on activities which cause the overhead cost; a process they have named Activity Based Costing (ABC). ABC has thus far been limited to the use of a single activity to allocate any cost pool. This paper argues that most cost pools have multiple cost drivers and should therefore be allocated using multiple activities and introduces the concept of Multiple Activity Based Costing.

scholarly journals ACTIVITY BASED COSTING SYSTEM : MODEL PENELUSURAN BIAYA OVERHEAD YANG AKURAT PADA UMKM SILK HOUSE SABBENA SOPPENG

2020 ◽  
Vol 4 (2) ◽  
pp. 310-322
Author(s):  
Syamsu Alam
Keyword(s):  
Production Process ◽  
Product Category ◽  
Cost Driver ◽  
System Model ◽  
Activity Based Costing ◽  
Cost Drivers ◽  
The Difference ◽  
Costing System ◽  
The Cost ◽  
Descriptive Method

This study aims to trace the absorption of overhead costs in the production process at Sabbena Soppeng's silk house, to identify appropriate cost drivers in allocating overhead costs to products that are accurate and do not occur distortion. This research uses descriptive method. Collecting data through interviews, observation, documentation. The analysis was carried out by applying a two-stage activity-based costing model. First, trace overhad costs to the “cost pool”. Second, trace the overhead costs to the product using multiple cost drivers. The results showed: a) the product category " Kain Sutera" shows a smaller difference of Rp. 3,253.62; b) product category "Sarung sutra ST-0 Standar" shows a bigger difference of Rp 10,997.4; c) product category "Sarung sutera ST-1 Standar" shows a bigger difference of Rp 22,420.49; d) product category "Sarung sutera ST- Sedang" shows a bigger difference of Rp. 28,352.51; e) product category “Sarung Sutera ST-ASL” shows a bigger difference of Rp. 278,342.75. The difference is due to the fact that the traditional overhead system does not use several cost drivers. Meanwhile, the ABC system uses a multi cost driver in charging BOP. So that with the ABC System it is considered that the BOP allocation is more accurate. Keywords : Activity Based Costing, Cost of Production.

scholarly journals ANALISIS DETERMINASI BIAYA PRODUKSI DENGAN PENDEKATAN ACTIVITY BASED COSTING SYSTEM (ABC SYSTEM) (STUDI KASUS DI UD. PRIMA BHAKTI KARAWANG)

BUANA ILMU ◽  
2018 ◽  
Vol 3 (1) ◽  
Author(s):  
Ade Suhara ◽  
Bona Herman Sianturi
Keyword(s):  
Food Industry ◽  
Production Costs ◽  
Activity Based Costing ◽  
Cost Drivers ◽  
System Method ◽  
Production Activity ◽  
High Production ◽  
Cost Of Production ◽  
Costing System ◽  
The Cost

ABSTRACT UD. Prima Bhakti is a food industry that is engaged in processing cassava into cassava chips which are located at Jalan Kemuning, Karangligar Village, West Telukjambe District, Karawang District, West Java. This factory experienced problems in the system of controlling high production costs which impacted on rising selling prices. The occurrence of production costs swelling due to the lack of good cost management. The costing used by the company is currently based on past cost data which is then made an estimated cost that will occur. From the above problems carried out a study of the design of the cost of production through the approach of Activity Based Costing (ABC). Activity Based Costing method is a method of calculating costs that imposes first costs on activities, then on products based on the use of activity by each product. Activity Based Costing System method identifies the activities carried out, tracing the costs to these activities and then using various cost drivers to trace costs, activities to cost objects. Key words: Cassava chips, cost of production, activity based costing ABSTRAK UD. Prima Bhakti merupakan industri makanan yang bergerak di bidang pengolahan singkong menjadi keripik singkong yang beralamat di Jalan Kemuning Desa Karangligar Kecamatan Telukjambe Barat Kabupaten Karawang Jawa Barat. Pabrik ini mengalami permasalahan pada sistem pengendalian biaya produksi yang tinggi yang berimbas pada naiknya harga jual. Terjadinya pembengkakan biaya produksi dikarenakan belum adanya manajemen biaya yang baik. Penetapan biaya yang dipakai perusahaan saat ini didasarkan pada data biaya masa lalu yang kemudian dibuat taksiran biaya yang akan terjadi. Dari permasalahan di atas dilakukan suatu penelitian mengenai rancangan harga pokok produksi melalui pendekatan Activity Based Costing (ABC). Metode Activity Based Costing adalah metode kalkulasi biaya yang membebankan biaya pertama-tama pada aktivitas, lalu pada produk berdasarkan penggunaan aktivitas oleh setiap produk. Metode Activity Based Costing System mengidentifikasikan aktivitas yang dilaksanakan, menelusuri biaya keaktivatas tersebut dan kemudian menggunakan berbagai pemicu biaya (cost drivers) untuk menelusuri biaya, aktivitas ke objek biaya. Kata kunci : Keripik singkong, harga pokok produksi, activity based costing

scholarly journals The Budgetary Process with a Use of Modern Approaches in Cost Management

2016 ◽  
Vol 64 (3) ◽  
pp. 939-947 ◽  
Author(s):  
Jiří Hammer
Keyword(s):  
Specific Activity ◽  
Cost Management ◽  
Linear Equations ◽  
Causal Link ◽  
Variable Number ◽  
Operating Costs ◽  
Activity Based Costing ◽  
Cost Drivers ◽  
Process Structure ◽  
The Given

State organisational units still compile their budget as incremental and as such it therefore disregards causes of the origination of costs and does not put a sufficient pressure on increase in efficiency of economy. This article aims to propose a budgetary setup for operating costs using the methods of ABC/ABM (Activity Based Costing/Activity Based Management) in state organisational units (SOU). Essence of the proposed procedure towards budgetary setup as well as cost management is specification of such cost drivers that reflect the causal link between activities of the given organisation and indirect operating costs. Through a system of linear equations there is in turn resolved parity between demands on budgetary funding of a specific activity and full costs of activities. Using a multiple regression analyses, for selected cost groups there was also tested their dependence upon criteria that may act as general cost drivers. Undertaken research has also uncovered that frequently used variable “number of workers” cannot explain the analysed cost groups. Benefit of proposed solutions is increase in efficiency of SOU economy. This way, the management receives a tool for budgeting and cost control not only within the process structure based on activities, but also within individual items of the budgetary classification.

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