scholarly journals Implementation of an Activity Based Costing System (ABC)

2018 ◽  
Vol 4 (2) ◽  
pp. 51-62
Author(s):  
L.O. Rodríguez Manay ◽  
I. Guaita ◽  
I. Marqués
Keyword(s):  
Special Reference ◽  
Agricultural Sector ◽  
Cost Model ◽  
Cost Accounting ◽  
Service Industries ◽  
Production Costs ◽  
Activity Based Costing ◽  
Model Based ◽  
Primary Sector ◽  
Costing System

Research has been presented on the application of activity-based cost (ABC) in the manufacturing and service industries in the agricultural sector, which examines recent advances in cost accounting methods with special reference to the application of cost based in methodological activities in the primary sector. Accordingly, this document proposes using a transparent, flexible, easy to apply and understand cost model; based on activities to calculate and manage production costs in companies.

scholarly journals PENERAPAN METODE ACTIVITY BASED COSTING DALAM PENENTUAN HARGA POKOK PRODUKSI PADA PT. SARIMELATI KENCANA (PIZZA HUT MANADO TOWN SQUARE)

2013 ◽  
Vol 8 (3) ◽  
Author(s):  
Stephany Ch. Pelleng ◽  
Herman Karamoy ◽  
Victorina Tirajoh
Keyword(s):  
Quantitative Data ◽  
Cost Driver ◽  
Production Costs ◽  
Activity Based Costing ◽  
Traditional System ◽  
Pricing Process ◽  
Costing System ◽  
The Right ◽  
The Cost ◽  
Pizza Hut

Nowadays, every company has to have a right and efficient way to know their own pricing process. The better the company count it, the better it would be to compete in the market because the right method or system will decrease the cost and increase the profit. Activity Based Costing System is a method of calculating the cost of goods manufactured based on activities in a company using more cost driver, so it can calculate more accurate. This method is expected to be applied to the PT. Sarimelati Kencana who still using the traditional system for calculating the cost of goods manufactured. This research has a purpose to know the cost of goods manufactured in the company using activity based costing system. There are qualitative and quantitative data on this project. Qualitative data for company profile and quantitative data for production costs. This is descriptive research and the result shows that the pricing process using ABC method give overcost condition for pizza hut personal and undercost condition for pizza hut regular and large.

Activity-Based Costing System for a Small Manufacturing Company

2011 ◽  
pp. 1-19 ◽  
Author(s):  
Arkadiusz Januszewski
Keyword(s):  
Integrated Circuits ◽  
Production Costs ◽  
Cost Calculation ◽  
Activity Based Costing ◽  
False Information ◽  
Direct Production ◽  
Costing System ◽  
The Right ◽  
The Cost ◽  
Selection Of

The selection of the right cost calculation method is of critical importance when it comes to determining the real product profitability (as well as clients and other calculation objects). Traditional cost calculation methods often provide false information. The literature offers many examples of big companies that have given up traditional methods and applied a new method: activity-based costing (ABC). They discovered that many products that are manufactured generate losses and not profits. Managers, based on incorrect calculations, mistakenly believed in the profitability of each product. Turney (1991) reports on an example of an American manufacturer of over 4,000 different integrated circuits. The cost calculation with the allocation of direct production costs as machinery-hour markup demonstrated a profit margin of over 26% for each product. Implementing ABC showed that the production of more than half of the products was not profitable, and having factored in additional sales and management costs (which accounted for about 40% of the total costs), it was as much as over 75%.

scholarly journals Activity-based costing on the example of prune-drying company

2014 ◽  
Vol 59 (3) ◽  
pp. 363-373
Author(s):  
Nikola Popovic ◽  
Marina Vasilic
Keyword(s):  
Indirect Costs ◽  
Cost Accounting ◽  
Production Costs ◽  
Quality Data ◽  
Accounting System ◽  
Activity Based Costing ◽  
Accounting Systems ◽  
Business Decision ◽  
Modern Approach ◽  
Cost Accounting System

This paper examines the possibility of application of the activity-based costing in a company engaged in drying fruit. Activity Based Costing (ABC) was developed due to the shortcomings of traditional cost accounting systems, which was shown to have serious limitations, on one hand, and due to the need for more accurate cost price, on the other. This is of great importance for business decision making, which requires quality data and information, because the intense technical and technological progress has significantly altered the environment companies operate in. Along with this fact, major changes in cost structure occurred, which reflected through the increase of the indirect cost portion, and decrease of direct labor and material costs. Traditional cost accounting methods allocate indirect production costs using keys which are no longer appropriate for the new circumstances, and therefore typically allocate unreasonably high amount of indirect costs to those products which are produced in larger series. ABC cost accounting system firstly allocates indirect costs to pre-defined activities, and afterwards carries them to cost and profit drivers. The application of ABC costing in Serbia is at the very beginning. Having in mind that the privatization and the restructuring phase in the economy is followed by the establishment of a new management with fresh ideas, this can be a good timing for companies to introduce modern approach and modern methods of cost accounting. ABC method is very convenient for application in service companies, food processing industry, confectionery companies, driers, sugar refineries, breweries, dairies, mills etc.

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 SISTEM INFORMASI AKUNTANSI DALAM MENUNJANG PENENTUAN HARGA POKOK PRODUKSI BERBASIS CLIENT SERVER

2020 ◽  
Vol 10 (1) ◽  
pp. 53-58
Author(s):  
Sri Wahyuningsih
Keyword(s):  
Raw Materials ◽  
Accounting Information ◽  
Production Costs ◽  
Activity Based Costing ◽  
Accounting Information Systems ◽  
Client Server ◽  
Development Accounting ◽  
Cost Of Production ◽  
Costing System ◽  
The Cost

Abstract Accounting information systems are needed by companies, because they help a lot, in the effectiveness and efficiency of business problems. Determination and calculation of cost of production is a very important thing to know the production costs incurred as well as the benefits to be obtained. PT. Barokah Sejahtera is a company engaged in wall paint products, where in its products depends on the policy of determining and calculating factory overhead costs, if factory overhead costs are the dominant cost, then allocation based on volume will cause errors in determining cost of production by calculating the overall cost raw materials issued with products produced during the production process. In addition, the process of recording and calculation requires considerable time which results in difficulties in analyzing profits. To overcome these problems, the application of Activity Based Costing System and Client Server based methods is carried out. All activities are intended to produce products with adequate costs. The main focus of company management on activity management, namely planning and controlling all company activities in producing products with the appropriate cost level. The research method used is the RND method / Reset and Development Accounting information system calculation of the cost of production is expected to be applied to the company so that it can be more effective and efficient in calculating the cost of production

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.

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

2021 ◽  
Vol 10 ◽  
pp. 195-205
Author(s):  
Nurul Farahin Zamrud ◽  
Sri Nur Areena Mohd Zaini ◽  
Mohd Yazid Abu
Keyword(s):  
Cost Accounting ◽  
Cost Driver ◽  
Production Costs ◽  
Activity Based Costing ◽  
Economic Reality ◽  
Abc Method ◽  
The 1960S ◽  
The Moment ◽  
The Cost

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.

scholarly journals Literature Study : Activity-Based Costing System

2020 ◽  
Vol 1 (2) ◽  
pp. 46-49
Author(s):  
Larashati B'tari Setyaning ◽  
Andriani Okta Fara Dita
Keyword(s):  
Production Costs ◽  
Costs And Benefits ◽  
Activity Based Costing ◽  
Literature Study ◽  
Cost Approach ◽  
Goods And Services ◽  
Approach Method ◽  
Costing System ◽  
High Level ◽  
The Cost

Increasing competition forces companies to be competitive. Competitiveness can be achieved by conveying product value to consumers at low prices. To achieve this, a good cost approach is needed, one of which is the Activity-Based Costing System (ABC). In this literature study the authors divide ABC into 3 parts, namely the concept of ABC, the stages in ABC and the costs and benefits of implementing ABC. ABC is a cost approach method by calculating the cost of activities to produce products, both goods and services where these activities require resources. After conducting a literature study, the authors found similarities and inequalities among several literatures and then draw conclusions. The conclusion that can be drawn is that the ABC system is used by companies to get more accurate production costs, accurate production costs can increase company profits and the criteria for companies that are suitable for using the ABC system are companies with a high level of product diversity, there is intense competition with companies that produce similar products, as well as the cost of implementing the ABC system is low.

scholarly journals Enhancement of Time-Driven Activity–Based Costing (TDABC) by using Simulation in Manufacturing Process towards Industry 4.0

2019 ◽  
Vol 8 (10) ◽  
pp. 1895-1900 ◽  
Keyword(s):  
Simulation Model ◽  
Industry 4.0 ◽  
Industrial Revolution ◽  
Model Simulation ◽  
Conventional Technique ◽  
Cost Driver ◽  
Production Costs ◽  
Activity Based Costing ◽  
Automotive Manufacturing ◽  
Costing System

The new industrial revolution brings changes to organizations that will need to adapt their system to sustain their business in a highly competitive market. In term of costing, most manufacturers continuously working towards reducing production costs by focusing on activities process improvement and resources as a cost driver. One of the current problems faced by most manufacturers that adopted Time-Driven Activity-Based Costing (TDABC) is lack of combined used of simulation as a tool for validation. Conventional technique also caused users estimated incorrect variables consideration to the costing system. The purpose of this paper is to provide a system for managers or decision makers to analyze results which can significantly reduce production costs by eliminating unnecessary resources with the aid of a simulation model. Simulation was proposed as new approach to determine the optimum results based on the given scenarios. An analysis on how the framework was implemented at an automotive manufacturing company was illustrated the enhancement of TDABC by using simulation. Results of conventional method using Activity Based Costing (ABC) was compared with TDABC where existing production layouts and parameters were maintained. Simulation model was created based on current situation and the results were compared to the old method. The results indicated that simulation can easily be adapted to support the planned and operational TDABC activities. Towards industry 4.0 it was proven that simulation is one of the key technologies in the new industrial revolution. Besides that, TDABC methodology in this research is more accurate and faster, by means of an enhanced decision-making process and supported organization manufacturing system.

scholarly journals Implikasi Penerapan Activity Based Costing System Terhadap Kinerja Perusahaan Dan Keunggulan Bersaing

2020 ◽  
Vol 12 (2) ◽  
pp. 149-172
Author(s):  
Diah Anugrah Sharasanti
Keyword(s):  
Production Cost ◽  
Production Costs ◽  
Strategic Decision ◽  
Strategic Decision Making ◽  
Company Performance ◽  
Competitive Advantages ◽  
Activity Based Costing ◽  
Method Of Calculation ◽  
Costing System ◽  
Product Costs

The strategy for determining the accurate production cost is one way for the company to compete among its competitors. Activity Based Costing assumes allcosts have a cause, and the causes can be managed so that the costs charged can be effective and efficient. Several studies have shown that there are differences in production costs between calculations using traditional methods and Activity Based Costing. Previous studies have shown that production costs are more accurate when using the Activity Based Costing method of calculation. Bjornenak and Mitchell (1999) in Rendy and Devie (2013) argue that Activity Based Costing is a system that is promoted and adopted as a basis for strategic decision-making and to improve earnings performance. According to Reimann (1990) the use of the Activity Based Costing system encourages companies to produce products that have competitive advantages. The results of several studies show that the ability of the Activity Based Costing system can not only measure product costs accurately, but the information generated can be used for various other strategic interests within the company, and the implementation of the Activity Based Costing system is not only focused on the financial aspects, but also on other nonfinancial aspects which are indicators of the success of company performance.   

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