The activity-based costing model trajectory: A path of lights and shadows

Fitó, M. Àngels; Llobet, Joan; Cuguero, Natalia

doi:10.3926/ic.1107

Cited by 12 publications

(14 citation statements)

References 48 publications

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“…Kaplan and Anderson [22] highlighted the difficulty and complexity related to identifying the various activity drivers. Fito et al [35] considered that implementing the ABC model has been interrupted due to conceptual problems. In turn, according to Ouassini [36], the adoption of the ABC system has a very high software cost, requiring investment in staff training.…”

Section: Literature Reviewmentioning

confidence: 99%

Activity-Based Costing (ABC) and Its Implication for Open Innovation

Quesado

Hounsell

2021

Journal of Open Innovation: Technology, Market, and Complexity

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Activity-based costing system, commonly known as the ABC system, emerged as a costing method capable of overcoming the limitations of traditional costing systems in face of economic and technological developments, namely, the arbitrary and imprecise allocation of indirect costs from distortions in the imputation criteria. In the current context, the development of an adequate costing system is of extreme importance in organisations because they feel the need to properly manage the resources at their disposal and control their costs to achieve efficient and effective management. Thus, this study aims to analyse international publications on the activity-based costing system in recent years, identifying trends in evolution and future research opportunities. Based on bibliometric techniques, the outputs obtained in the Web of Science (n = 752) and Scopus (n = 1107) databases were analysed in bibliometrix R package to make a systematic mapping and review of the literature. After removing duplicates, we obtained a final output of 1419 articles. The analysis of these publications points to a growing trend in the publication of articles on ABC, highlighting publications in partnership and their dispersion in magazines from different areas. The bibliometric analysis carried out results on the authors’ global research performance over time, and we highlighted the pioneering publications every five years and analysed the general evolution. When analysing based on publication authors over time, we highlighted the main research themes and countries where studies had been carried out. On the other hand, we also highlighted the collaborative network between institutions, authors, and countries over time.

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Section: Literature Reviewmentioning

confidence: 99%

Activity-Based Costing (ABC) and Its Implication for Open Innovation

Quesado

Hounsell

2021

Journal of Open Innovation: Technology, Market, and Complexity

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“…Accurate cost data will be collected via the four basic phases of ABC. Based on the detailed cost details, management will make better decisions (Fito et al, 2018).…”

Section: Introductionmentioning

confidence: 99%

A case study on the application of activity based costing on the magnetic inductor

Yazid

Farahin

Areena

2021

IJIM

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Speedy improvements in cost accounting since the 1960s have been noticed, particularly after the 1980s, in the percentage of total cost, overhead costs have increased. The problem of overhead allocation was faced by several companies and a disparity between the available methods of overhead allocation was developed. Because of skewed facts about the viability of their orders, goods and clients, traditional cost accounting (TCA) not anymore represents the actual economic reality. Consequently, in the moment of increasingly growing material liquidity and ambiguity, a new costing approach is needed to address the weakness of TCA. The goal of the study is to establish a new costing structure using activity based costing (ABC) method to the magnetic inductor for better precision. The case study is located at electronic industry in Pahang, Malaysia. ABC reports on the costs of manufacturing, selling or funding the goods used in the operations. The job was done correctly by the operator to accomplish the entire mission. The maximum time used by operators is at epoxy application activity which is 44.04% and the smallest is 0.64% at oven curing and boundary inspection activity. The highest amount of cost of capacity is epoxy application activity with MYR 1,665,600.00 and the quantity of material utilized is selected as the cost driver. Since the product required volume is up to 10%, production costs are expected to increase by MYR 4,160,614.85 while the unit product cost is forecast at MYR 0.79. Therefore, ABC is an cost management insightful process and cost control efficient approach.

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“…When there are multiple products, the situation become more worst. Therefore, Robert and Robin characterised ABC as one of the better to solve those problems [5].…”

Section: Introductionmentioning

confidence: 99%

“…Through the four simple steps of ABC, accurate costs information will be obtained. The management would be making better decision making based on the accurate cost information [5].…”

Section: Introductionmentioning

confidence: 99%

Comparative Study: Activity Based Costing and Time Driven Activity Based Costing in Electronic Industry

Zamrud¹,

Abu²

2020

JMMST

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By the 1980s, Traditional Cost Accounting (TCA) is no longer reflecting the current economic reality due to distorted information about the profitability of their orders, products, and customers. In addition, Activity-based Costing (ABC) is a costing method originally developed to overcome the shortcoming of TCA method in the era of rapidly increasing product complexity and diversification. However, it is not universally accepted because it ignores the potential for unused capacity which will be beneficial for forecasting. The objective of this work is to compare the advantages of ABC and Time-driven Activity-Based Costing (TDABC) by analyzing the features towards costing sustainment. The work begins by collecting data at electric electronic industry located at Pahang and the product selected is a magnetic inductor. ABC focuses on the costs inherent in the activity based products to produce, distribute or support the products concerned. TDABC uses time equation and capacity cost rate (CCR) to measure the unused capacity with respect to the time and cost. This work has successfully compares the methodology between ABC and TDABC in electronic industry. The item such as stages for cost allocation, determination of drivers, action taken for an additional activity, cost consideration for implementation, system building, system update, information given from each method, transparency, overestimation of cost, differentiation of service level, oversimplification of activities and capacity forecast and planning. It concludes that both have their strength according to the industry needs.

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The activity-based costing model trajectory: A path of lights and shadows

Cited by 12 publications

References 48 publications

Activity-Based Costing (ABC) and Its Implication for Open Innovation

Activity-Based Costing (ABC) and Its Implication for Open Innovation

A case study on the application of activity based costing on the magnetic inductor

Comparative Study: Activity Based Costing and Time Driven Activity Based Costing in Electronic Industry

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