Cost-system choice in a multidimensional knowledge space: traditional versus activity-based costing

2009 ◽  
Vol 48 (3) ◽  
pp. 358 ◽  
Author(s):  
Her Jiun Sheu ◽  
Chao Yi Pan
Keyword(s):  
Activity Based Costing ◽  
Knowledge Space ◽  
Cost System ◽  
System Choice

scholarly journals Primary Research of the Advantages and the Cost Control of the ABC & EVA Integrated System

2010 ◽  
Vol 3 (3) ◽  
pp. 141
Author(s):  
Haibo Hu
Keyword(s):  
Cost Control ◽  
Control Strategies ◽  
Economic Value ◽  
Value Added ◽  
Capital Cost ◽  
Integrated System ◽  
Activity Based Costing ◽  
Cost System ◽  
Integrated Cost ◽  
The Cost

The integrated product of Activity-Based Costing (ABC) and Economic Value Added (EVA) is the ABC & EVA system, i.e. the integrated cost system. Traditional ABC method gives priority to the interior activity chain of enterprise to implement the cost analysis, but ignores the capital cost, so the cost accounting is not complete. The ABC & EVA system brings the capital cost into the cost management, which could not only open out the real economic value created by the cost objects, but extend the pure cost computation of ABC to the performance evaluation. Based on the principle of the ABC & EVA system, the enterprise cost control strategies under the integrated cost system are proposed.

The Value of Activity-Based Costing in Competitive Pricing Decisions

2004 ◽  
Vol 16 (1) ◽  
pp. 133-148 ◽  
Author(s):  
Eddy Cardinaels ◽  
Filip Roodhooft ◽  
Luk Warlop
Keyword(s):  
Price Setting ◽  
Activity Based Costing ◽  
Market Segments ◽  
Informative Feedback ◽  
Pricing Decisions ◽  
Cost System ◽  
Cost Allocations ◽  
Traditional Costing ◽  
Market Feedback ◽  
Competitive Pricing

This paper reports experimental evidence on the merits of activity-based costing (ABC) for price-setting in competitive markets that differ in their ability to provide informative feedback. Earlier research has shown that informative market feedback dominates the effects of cost-system design. In a multimarket context involving cost allocations, the present results suggest that cost-system refinement can play a significant role in price-setting, even in the presence of informative market feedback. Specifically, ABC provides benefits over volume-based costing in market segments in which biased cost allocations produce accounting losses that hinder learning from superior competitors. Compared to these informative settings, additional evidence also shows that performance is negatively affected by less informative market feedback. Yet in less informative settings, ABC still outperforms traditional costing, presumably because it helps to filter irrelevant competitor feedback from the decision process.

Explaining implementation difficulties associated with activity-based costing through system uses

2018 ◽  
Vol 19 (1) ◽  
pp. 181-198 ◽  
Author(s):  
Elodie Allain ◽  
Claude Laurin
Keyword(s):  
Resistance To Change ◽  
Insurance Industry ◽  
Insurance Company ◽  
Activity Based Costing ◽  
General Applicability ◽  
Content Type ◽  
Cost System ◽  
Scope Of Application ◽  
Costing System

Purpose The purpose of this paper is to explore how and why the uses (enabling or controlling) of an activity-based costing system could cause difficulties in implementing such a cost system. Design/methodology/approach The authors conducted a case study in a French insurance company. Three successive research periods were undertaken: from March to August 2005, between October 2008 and June 2009, and in 2012. In total, 51 interviews were conducted during these periods. Other useful information was also collected through conversations, observation, and through the consultation of internal documents. Findings The results show that designing a cost system aimed at being simultaneously used in controlling and enabling ways can generate important difficulties. Furthermore, the results show that attempting to get around these difficulties could result in investing significant amounts of resources with no guarantee of success. Research limitations/implications Beyond the difficulties of extending the scope of application of case studies, the study was conducted in an organization involved in the insurance industry which could further limit its general applicability. Practical implications Based on the experience at Rassura, the authors argue that managers should be aware that designing and implementing a cost system that can simultaneously be used in both controlling and enabling ways is a very difficult, if not an insurmountable challenge. Originality/value The results highlight that one important characteristic of a cost system, how it is used, could explain, at least partially, implementation difficulties related to technical challenges, resistance to change and lack of resources.

scholarly journals Application of the Activity-Based Costing Method for Unit-Cost Calculation in a Hospital

2015 ◽  
Vol 8 (1) ◽  
pp. 165 ◽  
Author(s):  
Mahdi Javid ◽  
Mohammad Hadian ◽  
Hossein Ghaderi ◽  
Shahram Ghaffari ◽  
Masoud Salehi
Keyword(s):  
Unit Cost ◽  
Cost Price ◽  
Medical Services ◽  
Cost Calculation ◽  
Accounting System ◽  
Activity Based Costing ◽  
Hospital Managers ◽  
Cost System ◽  
Abc Method ◽  
The Cost

<p><strong>BACKGROUND:</strong> Choosing an appropriate accounting system for hospital has always been a challenge for hospital managers. Traditional cost system (TCS) causes cost distortions in hospital. Activity-based costing (ABC) method is a new and more effective cost system.</p> <p><strong>OBJECTIVE:</strong> This study aimed to compare ABC with TCS method in calculating the unit cost of medical services and to assess its applicability in Kashani Hospital, Shahrekord City, Iran.‎</p> <p><strong>METHODS:</strong> This cross-sectional study was performed on accounting data of Kashani Hospital in 2013. Data on accounting reports of 2012 and other relevant sources at the end of 2012 were included. To apply ABC method, the hospital was divided into several cost centers and five cost categories were defined: wage, equipment, space, material, and overhead costs. Then activity centers were defined. ABC method was performed into two phases. First, the total costs of cost centers were assigned to activities by using related cost factors. Then the costs of activities were divided to cost objects by using cost drivers. After determining the cost of objects, the cost price of medical services was calculated and compared with those obtained from TCS.‎</p> <p><strong>RESULTS:</strong> The Kashani Hospital had 81 physicians, 306 nurses, and 328 beds with the mean occupancy rate of 67.4% during 2012. Unit cost of medical services, cost price of occupancy bed per day, and cost per outpatient service were calculated. The total unit costs by ABC and TCS were respectively 187.95 and 137.70 USD, showing 50.34 USD more unit cost by ABC method. ABC method represented more accurate information on the MAJOR COST COMPONENTS.</p> <p><strong>CONCLUSION:</strong> By utilizing ABC, hospital managers have a valuable accounting system that provides a true insight into the organizational costs of their department.<strong></strong></p>

Penentuan Tarif Layanan Kesehatan Gigi dan Mulut dengan Metode Activity Based Cost System

2019 ◽  
Vol 14 (2) ◽  
pp. 72
Author(s):  
Dinik Fitri Rahajeng Pangestuti ◽  
Indah Purbasari
Keyword(s):  
Health Care ◽  
Primary Health Care ◽  
Oral Health ◽  
Cost Driver ◽  
Activity Based Costing ◽  
Accounting Systems ◽  
Cost System ◽  
Primary Health ◽  
The Cost

Background: The result of the morbidity report at 2001, shown that dental and oral health in Indonesia is still become public complaint, it is around 60%, such as dental caries and periodontal disease. Dental public health effort to date has yet to be run with optimal due to various constraints, including: limitations of the power, the means of operating costs as well as social and economic conditions of society. Considering these constraints have developed a model of services in the form of a layered service (level of care) according to existing resources, in the form of Primary Health Care (PHC). But this time the tariff is determined by hospitals, especially the private hospitals are still considered high by most of society. In determining the cost of products as the basis for determining the price of the hospital sometimes still use traditional accounting systems that pricing anyway no longer reflects the activity because of the many categories that are not direct. The main difference between the calculation of the product cost of goods of traditional cost accounting by activity-based costing is the amount of cost driver (trigger) is used. In the determination of cost of products with activity-based costing uses the cost drivers in the sum more than in traditional cost accounting systems that use only one or two cost drivers based on the unit.Objective: To determine the differences between determination of dental and oral health service tariff by using Activity Based Cost System and traditional method.Methods: This research was a case study research and how to collect data from the financial reporting RSUD Panembahan Senopati Bantul about patient visits for examination in dental health polyclinic. Results: The results of this research were the determination of the tariff model of oral health services by using Activity-Based Cost systems, as well as a comparison between traditional fare tariffs and tariff system for Activity Based Cost System. Keywords: tariff, dental and oral health, Primary Health Care, activity based costing, cost driver.

How to optimize the cost and time of the acquisitions process?

2015 ◽  
Vol 34 (2) ◽  
pp. 41-50 ◽  
Author(s):  
Kate-Riin Kont
Keyword(s):  
Relevant Literature ◽  
Optimization Methods ◽  
Activity Based Costing ◽  
University Libraries ◽  
New Developments ◽  
Content Type ◽  
Cost System ◽  
Cost Behavior ◽  
The Cost ◽  
Print Format

Purpose – The purpose of this paper is to focus on the history and new developments of the optimization and analysis of acquisitions costs. More specifically, the acquisition cost and time optimization methods studied concern primarily print format books. Though e-books have begun to be developed more and more, the print format books – both scientific books and textbooks – are still very important for university libraries and continue to pour into acquisition activities. Design/methodology/approach – The data used in this paper are based on a review of relevant literature to provide an overview of the different concepts of the budget allocation and cost accounting methods suitable for the optimizing cost and time of the acquisition process. Different methods are described via reviewing example studies. Findings – On the basis of the current study, it can be said that the acquisitions procedure is more labor-intensive than any other library procedure both historically and nowadays. Nonetheless, the routines of acquisitions have been fairly well fixed over the years and constantly have searched for new ways to reduce costs. The most popular methods to control the acquisitions budget have been centralized and cooperative acquisitions, using vendors for acquiring library materials, customer-based acquisitions, and price indexes. New costing methods described, like activity-based costing and time-driven activity-based costing methodologies seem both to be the best tools for understanding acquisitions cost behavior and for refining a cost system for university libraries. Originality/value – This paper raises a perspective in library acquisitions management that has not been dealt with before. Namely, it explores how the library materials selection moved from intrinsic wisdom of bookish librarians and “just in case” inventory model to “purchase by customer suggestion” model. In addition, how libraries moved from acting on the basis of guesses to examine the cost breakdown of the acquisitions-related activities in a library.

A Review of Traditional Cost System versus Activity Based Costing Approaches

2018 ◽  
Vol 24 (6) ◽  
pp. 4688-4694
Author(s):  
Nawal Omar M. Towati Altawati ◽  
Ng Kim-Soon ◽  
Abd Rahman Ahmad ◽  
Ali Abusalah Elmabrok
Keyword(s):  
Activity Based Costing ◽  
Cost System ◽  
System Versus

scholarly journals An application of activity-based costing in the chicken processing industry: a case of joint products

2017 ◽  
Vol 20 (1) ◽  
pp. 85-97 ◽  
Author(s):  
Panravee Kabinlapat ◽  
Siriluck Sutthachai
Keyword(s):  
Service Industries ◽  
Basic Process ◽  
Activity Based Costing ◽  
Processing Industry ◽  
Frozen Food ◽  
Cost System ◽  
Unit Costs ◽  
Cost Allocations ◽  
Joint Products ◽  
Costing System

A great deal of research has been presented on the application of activity-based costing (ABC) in the manufacturing and service industries. In the field of agribusiness, which focuses uniquely on joint products, few studies exist that illustrate applications of ABC. This research has therefore applied ABC to a food company, concentrating on fresh and frozen chicken processing production. The basic process of ABC, based upon five steps, was applied and demonstrated the difficulties in applying cost data collection, identifying activity and cost drivers, as well as collecting driver data. The results also revealed significant differences in unit costs derived by ABC and the company’s existing cost system, particularly within frozen food products. This may suggest the possibility of distorted cost allocations within the company’s current costing system.

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