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Integrated Manufacturing Systems
ISSN : 0957-6061
Article publication date: 1 June 1998
This paper presents two case studies on the implementation of activity based costing (ABC). The first case is a company based in Melbourne, Australia, which manufactures engineering components. The second case study is a specialty chemicals company based in Hong Kong. The case studies discuss the introduction of ABC and the benefits and problems experienced during implementation in each company. Based on the experiences of the two companies, factors critical to successful implementation of ABC systems are identified.
- Activity‐based costing
- Implementation
Sohal, A.S. and Chung, W.W.C. (1998), "Activity based costing in manufacturing: two case studies on implementation", Integrated Manufacturing Systems , Vol. 9 No. 3, pp. 137-147. https://doi.org/10.1108/09576069810210312
Copyright © 1998, MCB UP Limited
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Product costing using activity-based costing : a case study
Type of content, uc permalink, publisher's doi/uri, thesis discipline, degree name, journal title, journal issn, volume title.
As manufacturing enterprises have become less labour-paced the process of recovering overheads by allocation on the basis of direct labour costs has been challenged.
It has been claimed by proponents of Activity-based Costing (ABC) that it is possible to identify the real cost of production by careful identification of 'cost-drivers'.
This thesis examines the conceptual relations between ABC and traditional product costing models.
It analyses the ABC model to determine whether it produces results from different from allocation-based models.
The thesis reports the results of implementing activity-based costing in parallel with an existing costing system in a New Zealand manufacturing company.
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An Activity Based Costing-based : A Case Study of a Taiwanese Gudeng Precision Company
Traditional cost accounting allocation of manufacturing costs is not rigorous enough, resulting in product cost structure distortions. This responsibility for company operation should be internalized into business operations--prior to production--in order to reflect the true cost of the final product. Due to the use of traditional cost accounting, many organizations have not estimated their productional costs precisely. In this paper, we propose an integrated concept the Activity-Based Costing approached to solve the problem of manufacturing and cost evaluation. We include a case study of an Gudeng Precision Company (Semiconductor Process Equipment Factory) in Taiwan to show that the activity-based costing method estimates semiconductor front-end equipment manufacturing costs of a final product more accurately than traditional approaches do. The method can, therefore, provide information for use in existing manufacturing accounting systems and help managers incorporate manufacturing costs into their decision-making processes. Keywords: Activity-Based Costing, manufacturing cost, Semiconductor Process Equipment Factory
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Abstract: This study aims to identifying the benefits of the application of ABC system throuth a field study on companies operating in allahabad-india. In order to achieve such aims, a questionnaire was developed and distributed to the population of study. Spss program was used in the analysis. The study concluded with some results. The most apparent is that the expected benefits of behind the application of ABC system from the standpoint of these companies are ABC system helps to calculate the cost of the product more accurately, leads to enhance the costs control and ABC system provides the financial and non-financial information that help in taking sound administrative decisions such as fixing selling prices of products and exclusion of activities that do not add value to the product. The study recommends the companies should start gradually in applying ABC system by persuading the management of these companies on the importance of application the system because of its advantages and benefits. Keywords: ABC System, Traditional Cost System, Overhead.
Proceedings of the 9th Annual Conference of the International Group for Lean Construction, Singapore
Yong-woo Kim
Activity-Based Costing (ABC) has been popular since the 1980s because it prevents cost distortions and provides a process view which traditional cost accounting cannot provide. Activity-Based Costing is based on a ���flow view��� in production theory in that ABC adopts two-staged costing, ie, resources are assigned to activities and activities are assigned to cost objects. Lean construction comes from recognizing the limitations of current project management and applying ���lean production��� to the construction industry. This ...
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| Title: | Activity-based costing in banking services: A case Study of a large Indian Private Sector Bank | Authors: | | Keywords: | Financial management;Banking | Issue Date: | 2002 | Publisher: | National Institute of Bank Management, Pune | Abstract: | Accounting system in banking industry captures expenses and income relating to branches for regulatory and reporting needs but found to be less useful in operational and strategic decisions. Implementation of Activity Based Costing (ABC) is necessary for banks to collect internal cost data for each of the major activities and such cost data can be used for decision-making. Using data collected from two branches of a large private bank, this study demonstrated how activities 9 cost can be computed. The cost computed for the activities was then used to find product/service cost and cost associated with offering such services to different types of customers. Banks can use the activity analysis and costs for a variety of decisions like benchmarking, restructuring of branch network, offering certain exclusive services in certain branches, outsourcing decision, identification of critical activities that add value to the customers, etc. | URI: |
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COMMENTS
A Comparative Analysis and Implementation of Activity Based Costing (ABC) and Traditional Cost Accounting (TCA) Methods in an Automobile Parts Manufacturing Company: A Case Study.
Introduction Activity Based Costing and Management (ABCM) is one of many new financial and accounting tools aimed at providing more complete, better-aligned data on economic performance.
The objective of this case study is to use activity-based costing (ABC) to create an. overall analysis of the menu's profitability for a small independent restaurant. The case. study will follow Raab's (2003) research which created the first feasible restaurant ABC.
Chapter four focuses on the Activity-Based Costing model, starting with the fundamentals before explaining the benefits for applying this model as well as the limitations that the model comprises. Thereafter, the chapter includes a study of the differences between the traditional costing model and the ABC model.
AN ACTIVITY-BASED COSTING SYSTEM. Step 1: Identify the products that are the chosen cost objects. Step 2: Identify the direct costs of the products. Step 3: Select the activities and cost-allocation bases to use for allocating indirect costs to the products. Step 4: Identify the indirect costs associated with each cost-allocation base (activity).
USING ACTIVITY-BASED COSTING TO IMPROVE PERFORMANCE: A CASE STUDY REPORT by Kevin R. Moore, Major, USAF A Research Report Submitted to the Faculty In Partial Fulfillment of the Graduation Requirements
Time-Driven Activity Based-Costing Activity-based costing was introduced in the mid-1980s through several Harvard Business School cases and articles.1 While the settings of these cases differed, they all had one characteristic in common.
Abstract ARTICLE INFO ABSTRACT Activity based costing system (ABC) is a costing methodology that identifies activities in an organization and assigns the cost of each activity with resources to ...
This paper presents two case studies on the implementation of activity based costing (ABC). The first case is a company based in Melbourne, Australia, which manufactures engineering components.
This thesis examines the conceptual relations between ABC and traditional product costing models. It analyses the ABC model to determine whether it produces results from different from allocation-based models. The thesis reports the results of implementing activity-based costing in parallel with an existing costing system in a New Zealand ...
Abstract After more than 30 years of using Activity-Based Costing (ABC) to determine costs, just a few studies have analyzed its publications. This article aims to conduct a systematic, comprehensive literature review analyzing papers on ABC to overview what has been researched and give future research directions.
Previous studies have shown that activity -based costing is useful in two ways: (1) organizations with large a nd growing e xpenses in indirect and s upport costs and (2) organizations with a ...
Activity‐based costing is a powerful tool for managing overhead costs. I believe that the knowledge and experience of activity‐based costing which I gained through past consulting and research experiences are limited and need improvement.
We include a case study of an Gudeng Precision Company (Semiconductor Process Equipment Factory) in Taiwan to show that the activity-based costing method estimates semiconductor front-end equipment manufacturing costs of a final product more accurately than traditional approaches do.
The Activity-Based Costing Activity-Based Costing (ABC) has been successful in large scale industries for improving the operational performance by providing appropriate and accurate information on the consumption of . and improvement of work.force policies have provided an edge to become world class companies The key elements of cost of ...
Abstract The purpose of this study is to provide some empirical evidence about implementing Activity-Based Costing (ABC) in the hospitality industry in Iran.
g attention is now being given to analysing profits by costumers using an activity-based costing approach. Customer profitability analysis provides important information that can be used to determine which classes of customers should be emphasized or de-emphasized and the price to charge for customers services." (Drury, 2008) Activity-based costing is a new system of cost calculation ...
This case summarizes some of the challenges - managerial and technical - associated with transitioning to an activity-based costing (ABC) model. The primary objective of this case is to introduce the student to the rationale and mechanics behind the ABC accounting approach and to explore the untoward consequences of using traditional accounting methods.
d costing in the achievement of manufacturing ex cellence. It describes manufacturing excellence and the product cost in formation requirements of managers who seek to achieve it. It shows how conventional product costing fails to meet these needs, and dem onstrates how activity-based cost ing corrects these deficiencies. It explains how managers in manufac turing companies can use activity ...
This repository provides metadata of IIMB Publications and aimed at creating and preserving an archive of Institution scholarship. IIMB Publications include Articles, Working Papers (FULL TEXT), Book Chapters published by Faculty, Doctoral Dissertations by FPM Scholars and Project reports of Students enrolled in various courses of IIMB. Learn More IIMB- Faculty Publications Journal Articles ...