Activity Based Costing Method Research Articles

Factors of application of activity-based costing method: Evidence from a transitional country

This study examines the factors in the application of the activity-based costing (ABC) method in firms in a transitional country. The study adopts a quantitative approach by developing a Logit regression model. The study tests the model in a sample of 71 publicly-listed Vietnamese pharmaceutical companies in 2017 when Resolution Number 10, issued by the Central Political Party of Vietnam, took place. The primary data was collected from a company survey. The study finds that indirect cost proportion, competition pressure in price and quality, and product diversification significantly affect a firm's decision of whether to implement the ABC method. In Vietnam, most of the pharmaceutical companies are state-owned. Consequently, the use of a research context whereby the market economy is combined with state regulation to test the hypothesized factors is of value. Our findings have implications for managerial practice and public policy.

Time-Driven Activity-Based Costing Accurately Determines Bundle Cost for Rotator Cuff Repair

The purpose of this study was to determine the cost of the episode of care for primary rotator cuff repair (RCR) from day of surgery to 90 days postoperatively using the time-driven activity-based costing (TDABC) method. The secondary purpose of this study was to identify the main drivers of cost for both phases of care. This retrospective case series study used the TDABC method to determine the bundled cost of care for an RCR. First, a process map of the RCR episode of care was constructed in order to determine drivers of fixed (i.e., rent, power), direct variable (i.e.,healthcare personnel), and indirect costs (i.e., marketing, building maintenance). The study was performed at a Midwestern tertiary care medical system, and patients were included in the study if they underwent an RCR from January 2018 to January 2019 with at least 90 days of postoperative follow-up. In this article, all costs were included, but we did not account for fees to provider and professional groups. The TDABC method calculated a cost of $10,569 for a bundled RCR, with 76% arising from the operative phase and 24% from the postoperative phase. The main driver of cost within the operative phase was the direct fixed costs, which accounted for 35% of the cost in this phase, and the largest contributor to cost within this category was the cost of implants, which accounted for 55%. In the postoperative phase of care, physical therapy visits were the greatest contributor to cost at 59%. In a bundled cost of care for RCR, the largest cost driver occurs on the day of surgery for direct fixed costs, in particular, the implant. Physical therapy represents over half of the costs of the episode of care. Better understanding the specific cost of care for RCR will facilitate optimization with appropriately designed paymentmodels and policies that safeguard the interests of the patient, physician, and payer. IV,therapeutic case series.

ANALISIS PENERAPAN METODE ACTIVITY BASED COSTING DALAM PENENTUAN HARGA POKOK KAMAR PADA ROUGE LOUNGE BAR, VILLAS & SPA TAHUN 2019

This study aims to contribute in determining the appropriate and accurate hotel rooms cost using activity based costing method at Rouge Lounge Bar, Villas & Spa. The technique in the data analysis used in this research is comparative descriptive quantitative analysis by applying activity-based costing method.The results of this study indicate that that there is difference between the calculation of the room cost using Activity Based Costing method and the method used by the management. The Activity Based Costing method developed smaller result of room cost calculation than the price calculation set by the management. The price difference for Deluxe room is in the amount of Rp. 576. 797 while for the Family rooms is in the amount of Rp. 636. 788. The price difference is caused by the imposition of overhead costs on each type of room used by the management using only single cost driver, this caused distortion cost. Meanwhile in the Activity-Based Costing method, the imposition of overhead costs to each product applies multiple cost drivers in accordance with the product consumption guidelines. Therefore, the ABC System is able to allocate activity costs appropriately based on the consumption of each activity.

Konaklama İşletmelerinde Faaliyet Tabanlı Maliyetleme Yönteminin Uygulanması: 5 Yıldızlı Bir Otelde Vaka Çalışması

The purpose of this study is to provide some empirical evidence about implementing the activity-based costing (ABC) method and how to calculate costs in a 5-star hotel operating in Alanya / Antalya and to discuss the cost results by comparing them with the traditional costing method. Due to the Covid-19 outbreak in 2020, the data of July 2019 were used to make cost calculations more accurate and healthy. While making cost calculations, the activities in the hotel are classified as four main (front office, housekeeping, service, kitchen) and one joint (including common and administrative expenses) activities. The study was adopted to the case study, and the data were obtained from the hotel officials. As a result of the study, it was concluded that ABC method is applicable in the case hotel and the calculated unit cost is more accurate and realistic than the traditional costing method.

PENERAPAN ACTIVITY BASED COSTING PADA TARIF JASA RAWAT INAP DI RSUI BANYU BENING BOYOLALI TAHUN 2020

The background of this research is that hospitals related to cost of goods are still struggling with the traditional cost system, the cost of the resulting product provides distorted production cost information, both under and over costing, thus affecting the determination of hospitalization rates. As an anticipation, it can be implemented to calculate the cost of products or services using Activity Based Costing (ABC). Research method: This research is a type of comparative research. The subjects in this study were RSUI Banyu Bening Boyolali, as for the object of research, namely the determination of inpatient room rates at the Banyu Bening Boyolali Hospital and the determination of inpatient room rates based on the ABC method. The data were obtained through interviews and based on the financial statements of the hospital. The data analysis technique is descriptive analysis technique through a comparative approach. The results of the study reflect that the calculation using the ABC method found 6 treatment classes experienced over cost and 1 treatment class experienced under cost. The underlying factor is the imposition of overhead costs on each product. In the traditional cost accounting method, the overhead costs for each product are concentrated in one of the cost drivers. This has an impact on the distortion of overhead costs. While the Activity Based Costing (ABC) method, overhead costs are charged to each cost driver. In the end, the Activity Based Costing (ABC) method is able to allocate the cost of activities in each treatment room accurately according to the consumption of each activity.

Analysis of Calculation Methods Currently Practised at V4 Agricultural Holdings

This paper assesses calculation methods in the Visegrad 4 countries (Czech Republic, Hungary, Poland and Slovakia) and, based thereon, recommends and considers activity-based costing (ABC) in the agricultural sector, while evaluating manager knowledge of ABC as an appropriate alternative to outdated, “conventional” methods of calculating costs that are used in practice. It was found that a majority of agricultural holdings in the V4 are currently using conventional cost calculation methods and the most frequent reason for their failure to incorporate ABC is low awareness among managers. Farms and agricultural holdings that have introduced ABC and utilise it to assign their costs evaluate its benefits highly positively, in particular, ABC’s more accurate identification of costs, mainly overheads; more effective cost management and the accuracy of price estimates. From this analysis and assessment, introduction of ABC is recommended for companies in order to obtain the different benefits associated with the method. Successfully implementing ABC leads to a number of advantages, especially in the inevitable decision-making agricultural holdings face about high overhead costs. From the information obtained, managers at agricultural holdings have little information, in most cases, about ABC as an appropriate alternative to the outdated “conventional” cost estimate methods practised today. It is therefore important to work on raising managers' awareness of new approaches to costing by publishing scientific articles with specific examples from practice, pointing out the advantage of the ABC method, especially with high overheads, which are almost the rule in agricultural holdings.

Activity-Based Costing’s Application in Determining Cost of Goods Manufactured at UD Barokah Jaya

Increasing global competition is resulting in upheaval in every industrial and trade world, industrial or manufacturing companies demand manufacturers to be more productive and efficient to get good and cheaper products. With the intense competition between industrial companies, the company must be able to implement a good strategy so that it is able to survive the competition that occurs today. Many companies realize that the cost system in their company is inadequate to compete in the current circumstances. One consistent problem is the difference in regulating and controlling production costs. This study aims to determine the comparison of cost of goods sold (HPP) using the method applied by UD Barokah Jaya at this time with the cost of goods produced by the activity-based costing (ABC) method. The analytical method used is descriptive quantitative analysis. The results showed that the HPP calculation using ABC gave lower results than the traditional method at the UD Barokah Jaya company.

A novel cost-management system for container terminals using a time-driven Activity-Based Costing approach

Cost-management systems play a significant role in the operations management of container terminal companies; however, in complex loading and discharging operations, traditional Activity-Based Costing (ABC) systems are costly and difficult to be built and maintained. A modified Time-Driven ABC method, considering all the procedures required to obtain the final product and estimating resource usage accordingly, has emerged in response to this challenge. This study provides terminal operators with an effective cost analysis tool using a time-driven ABC method to identify bottleneck in handling process and calculate the handling cost of cost objects. Also, this research uses a container vessel and ten shipping lines calling at Shanghai East Container Terminal as case studies, and presents a full cost analysis of the activities and their respective costs. This investigation provides insights into the causes of excessive logistics costs and highlights the benefits of applying Time-Driven ABC method in the container terminal industry, along with shortcomings and potential future research.

Applying the goal programming in the management of the 7P marketing mix model at universities-case study.

The decision-making relating to effective marketing is less supported by operational methodologies and optimizing methods in high education sectors than in the companies. This paper presents an application of goal programming as an aid for the optimizing marketing mix elements. It describes a project undertaken at one of the Universities in Poland considering the marketing mix includes all 7Ps elements at University. The constraints are first identified based on interviews with academic experts and survey. The analytic hierarchy process method is used to select the forms of promotional activities and Activity-Based Costing method are performed to determine the costs of the activities. Then, based on constraints, the multiple-criteria-programming model is built and applied to construct the marketing mix model at university, and it was solved using LP-Solve software AMPL. A comparison between the newly designed marketing mix and the existing one in terms of each of the criteria shows that the overall objective function could be greatly improved, optimized value can be obtained, and the model can be easily applied in any other high education sectors. The consequence of using the model is the optimal selection (with existing limitations) of promotional activities, taking into account their impact on the perception of the image of the university, significant from the perspective of students and impact on profitability, which is important from the perspective of the university management.

The Cost of Plastics in Compost

In urban Blantyre, there is ample green-waste and widespread interest in compost, but the feedstock is often contaminated with plastics. If composting is going to become more widely implemented, it must be profitable and ideally, competitive with chemical nutrients, however the time and cost associated with plastics removal is currently a bottleneck to profitability. In this study we investigated the financial sustainability of compost production using a Time-Driven Activity-Based Costing method over 16-weeks to identify the types and duration of each activity required. Combining these data with capital and operating costs, we then modeled the profitability of the facility to identify cost-bottlenecks and to determine scenarios that would lead to improved profitability. The results show that it took 1 h 50 min of labor to produce 165-L (0.065 m3) bag of compost. A total of 12.3% of the active labor time was spent sorting out plastics from the organic waste before composting, during composting and from the finished product before packaging. Until similar work is published on the topic, these values cannot be evaluated as being either optimal or wasteful, but rather, serve as a baseline against which future interventions—e.g., source separation, especially at markets can be evaluated. Though based in Malawi, the documented and modeled costs can be converted and scaled by other entrepreneurs/agencies who are interested in estimating the financial feasibility of composting in their own context.

Logistics model for precast concrete components using novel hybrid Ant Lion Optimizer (ALO) algorithm

Precast concrete component utilization for building projects has been considered to become the leading trend in construction industry around the world. The logistics costs for precast concrete elements have usually accounted for a large proportion in whole costs executing projects. According to previous studies of logistics cost optimization that have been focused on the costs of transportation and warehouse, however, other necessary costs have not been examined carefully as costs of purchase, depot, load and unload, installation. Therefore, this study provides the comprehensive model of logistics expenditures for precast concrete structures using the Activity-based costing (ABC) method. Also, this study develops the ALO algorithm by hybriding with other algorithms as opposition-based learning, mutation and crossover strategy to optimize costs based on ABC. By evaluating and comparing with previous study applying the genetic algorithm GA, the particle swarm optimization (PSO), the gray wolf algorithm (GWO) and the dragonfly-particle swarm optimization (DA-PSO) the conclusion has generated the superior results in terms of convergence speed, the high degree of accuracy and reducing the logistic cost.

Vakıf Yükseköğretim Kurumlarında Sürece Dayalı Faaliyet Tabanlı Maliyetleme Yönteminin Analizi

Changes in globalization and technology have made the competition in the education sector more in-tense. This change in competition has reduced the profit margins of educational organizations. In order to maintain their market share and maintain their assets under these conditions, organizations have had to put greater stress on cost management. Today, cost management has moved beyond simply being a sub-system of accounting and has become one of the main tasks of business management. Higher education organizations need to use scarce resources effectively and efficiently to achieve their goals, develop long-term strategies, and maintain their existence. The extent to which resources are used by whom and for what time should be determined correctly. The outputs obtained during this process should be checked and interpreted correctly. This study was designed as a case study and conducted in a vocational school of a foundation university in Istanbul. The aim of this study is to examine the service production process in foundation vocational school with different costing methods and to compare the results. For this purpose, the costs of the vocational school for the 2016-2017 accounting period were calculated by using both the traditional costing method and the time-driven activity-based cost-ing method. These two methods were then compared to find out their degree of accuracy in calculating the program costs.

The Application Activity Based Costing (ABC) As the Basis for Determining Inpatient Rates at The Al-Aziz Hospital in Jombang

The purpose of this study is: (1) to give an idea how the determination rates of hospitalization in AL-AZIZ hospital by using the method of Activity-Based Costing (ABC). (2) to know the comparison rates of hospitalization services based on calculations done by AL-AZIZ hospital management with a calculation based on the method of Activity-Based Costing (ABC). Informants in this study are a part of the accounting employees who are empowered to provide information to researchers. Data collection techniques used namely directional interview and documentation. The results of calculations using the ABC method give the calculation result is lower compared with that determined by the management of AL-AZIZ hospital in the VIP class and class I, as well as the calculation result is higher in class II and class III. The difference for each of VIP class, class I, class II, and class III Rp 17,764.02, Rp 17,434.25, (Rp 20,762.65), and (Rp 11,908.99).

Costs of CT Scan and Ultrasound Services Using the Activity-Based Costing Method

Background: The activity-based costing system allows organizations to estimate the exact cost of their services based on the consumed resources, which in turn translates into increased efficiency of healthcare organizations.
 Objectives: The current study aimed to estimate the cost of ultrasound and CT scan services using the activity-based costing (ABC) method.
 Methods: Following a descriptive-applied design, the total cost of the most commonly used ultrasound and CT scan services in Imam Khomeini Hospital of Ahvaz was calculated using the ABC method. Data were collected using special forms and a list of services’ costs. To estimate the costs for different hospital sectors, first, the principles of determining cost proportion per service were set, and then using the direct cost approach, costs were estimated.
 Results: The highest and lowest differences from government-approved medical tariffs were related to the facial (523,000 Rials) and lung (133,000 Rials) CT scans, respectively. Also, except for abdominal and pelvic CT scans, the estimated cost of services was higher than the tariffs. The highest and lowest share of costs were related to the depreciation of capital equipment (1,174,490,000 Rials) and energy consumed by activity centers (952,000 Rials), respectively.
 Conclusions: For most of the investigated services, the total cost was significantly higher than the approved tariffs. To make medical tariffs more realistic and to continuously improve the provision of healthcare services, it is necessary to use costing techniques like ABC.

Development of Effectiveness Method of Wireless Segments in Information System

This research aiming is more efficient information system on the basis of the development and practical application of methods and models that enable the preliminary assessment of the feasibility of wireless segments (WS) or the choice of rational structure of WS. Thus, the comprehensive evaluation of the effectiveness of the proposed options for the structure to use the wireless segment in the information system that we consider is the actual problem. To Developing a method of assessing the efficacy of WS in the information system which is the basic method of evaluating options for the structures is the method of WS activity-based costing. By using developed and the proposed methods and models for reducing time-consuming complexity of work with a preliminary assessment of whether to apply a different option structures WS, increase the efficiency of the preparation of recommendations on the choice of rational structure of WS among the options for upgrading or development of IP business or organization. In this paper, methods have been used for assessing the efficacy of RBCs in the information system. The research focused on efficient information system on the basis of the development and practical application of methods and models that enable the preliminary assessment of the feasibility of WS or the choice of rational structure of WS.

APLIKASI ACTIVITY-BASED COSTING PADA UMKM

The fact that there was a challenge for the UMKM sector was the lack of capability in terms of business menegement. One of them was accuracy in calculating the amount of the main price of production on the resulting product. even though that calculation was crucial in determining the selling price of the product. Therefore, it was important to apply a better method to make the right decision. The purpose of this study was to analyze the comparison of the calculation of the price of production using traditional costing (TC) and Activity-Based Costing (ABC) methods, as well as analyzed the advantage in gaining the application of this method. This research was a descriptive qualitative study with interview methods and documentation. The analysis showed that in the calculation of the underlying price between TC production and ABC, there was an undercosted of 4.04%, while for the profit difference there was 1.2%.

Use of activity-based costing approach for cost management in a railway transport enterprise

This research outlines a research study wherein an implementation of the activity-based costing (ABC) approach for cost management in a railway transport enterprise is addressed. ABC is an efficient technique for enhancing the quality of provided services and process complexity of certain railway companies, executing its activities at a regional or international scale. It is one of the new costing approaches that eliminate the inaccuracies and deficiencies of the traditional costing system. Compared to other costing techniques, considerable change lies especially in the way of assigning indirect cost units to activities based on actual causations, and subsequently, assigning activities to the very cost items by the intensity of their consumption. Furthermore, this approach allows decision-makers to identify specific cost item in terms of determining ways of how they can be managed. The main objective of this work is to elaborate a particular study with a draft application of the ABC method encompassing a description of procedure steps, along with relevant quantifications, as well as summarising the results obtained.

COMPARISON OF RATES ODONTECTOMY BASED ON CLINICAL PATHWAY WITH UNIT COST, ACTIVITY BASED COSTING METHOD DENTAL HOSPITAL OF HASANUDDIN UNIVERSITY

Determination of tariffs based on INA-CBGs causes polemics for the Hospital, because in some cases, the rates applied have experienced a difference when compared to the previous tariff. This fare difference, can be a benefit for the hospital but can also increase the burden on the hospital. One of the rates that makes a difference in hospitals is the treatment of impacted teeth. The problem with odontectomy measures is whether the INA-CBGs tariff can cover all costs in the odontectomy treatment service and whether the tariff is effective and efficient in odontectomy measures. This research is triangulation using secondary hospital data in 2019, is a case study that aims to analyze the unit cost or unit cost of Odontectomy based on Clinical Pathway with Activity Based Costing method which aims to compare it with the rates set by the Dental & Mouth Hospital of Hasanuddin University and INA-CBG rates. The cost calculation method uses the ABC (Activity Based Costing) method, allocating direct costs by calculating the costs of activities that occur using a cost driver based on the time of activity. There is a difference between the INA-CBGs odontectomy rates and the normal rates based on their qualifications. Efficiencies between INA-CBGs and normal rates for inspection activities (52.7%), lifting seams (76.3%) and controls (72.9%) for mild, moderate and severe odontectomy. There was an inefficient difference between INA-CBGs and normal rates for registration (100%), panoramic radiology (5.8%) and mild odontectomy (424.2%), moderate odontectomy (597.3%) and severe odontectomy (169.01%) ). The compilation of the unit cost tariff design against the Clinical Practice Guidelines based on the ABC method obtained a mild odontectomy rate of Rp. 1,602,293, -; moderate odontectomy of Rp. 1,773,293 and severe odontectomy of Rp. 1,944,293.

Redesigning Clinical Pathway of Elective Caesarean Section Using Activity-Based-Costing Reduce Exposure to COVID-19

This research objective is to discover non-value-added activities in the elective cesarean section (CS) clinical pathway (CP) through cost analysis using the ABC method and redesign elective CS CP at W Hospital. Activity-Based Costing (ABC) is an accounting system designed through activity management. The ABC system identifies all functions in the service process chain, calculates the activity costs, and assigns costs to cost objects, such as activity-based service products. This calculation method emphasizes the service process. The ABC method is seen as a unit cost calculation system that is suitable for hospitals. CP costing using the ABC method is a cost analysis using CP as the basis for service activities. The CP of Elective CS consists of various activities. This study used a case study approach. The eight informants were the head of finance, the head of medical services and support, one ob-gyn specialists, one anesthetist specialists, one outpatient installation nurse, one midwife, one inpatient installation midwives, and one nutritionist. The COVID-19 changed the procedures and influenced the activities of CS CP. The analyses were conducted using the ABC method and data triangulation. Non-value-added activities found were clinical assessment in the emergency room (ER), laboratory activities, and organic waste treatment. Non-value-added found in clinical assessment in the ER, laboratory examinations, and organic waste treatment. CP CS redesign consists of activities of admission, pre-operation, and post-operation, surgery, pharmacy, nutrition, medical records, laundry, billing, logistics, and management administration. The researchers suggest that W hospital should redesign elective CS CP activities to eliminate non-value-added activities.

SIMULASI PENERAPAN TIME-DRIVEN ACTIVITY-BASED COSTING PADA PERHITUNGAN HARGA POKOK JASA BENGKEL KURNIA MOTOR

In a service company, the cost of services is sometimes not calculated accurately by the owner or management. This is due to the difficulty of calculating the cost as indirect costs occur together with the activities of the services performed. One of the methods of calculating the cost of services is the Time-driven activity-based costing (TDABC) method. This study applied the method to calculate the cost of services of Kurnia Motor Workshop, a company that offers antique car restoration services. The analysis showed that the TDABC method was a suitable method to calculate the cost of services accurately in Kurnia Motor Workshop.