The Application of Time-Driven Activity Based Costing System on Inductors in Electrics and Electronics Industry

  • Filzah Lina Mohd Safeiee
  • Mohd Yazid AbuEmail author
  • Nik Nurharyantie Nik Mohd Kamil
  • Nurul Farahin Zamrud
Conference paper
Part of the Lecture Notes in Mechanical Engineering book series (LNME)


The adoption of traditional costing system (TCS) in manufacturing industry has motivated the need for improvements in the accounting system. The main problem of TCS is the inability to provide useful feedback to understand and allocate overhead costs and inaccurate to forecast on unused capacity. To perform this study, Time-driven activity-based costing (TDABC) is well suited for manufacturing industry, involving many activities with complex time drivers. TDABC is a variation and expansion of activity based costing where by process costs are analyzed based on time and resource consumption. TDABC seems to be one of the best tools for understanding cost behavior and for refining a cost system. This study is to apply TDABC method on electrics and electronics industry system. This improvement is to maximize the efficiency and effectiveness throughout the production system, cost and eventually increase the net income. From this work the information about cost and profitability quickly get and inexpensively. Several generally accepted methods of cost accounting have been described, of which TDABC is considered the most sophisticated and precise.


Time-driven activity-based costing Activity-based costing Traditional cost system Capacity cost rate Cost analysis 



This research is fully supported by Ministry of Higher Education through RDU190156 and FRGS/1/2018/TK03/UMP/02/34. The authors fill acknowledged Universiti Malaysia Pahang for the approved fund which makes this important research viable and effective.


  1. 1.
  2. 2.
    Zhou, B.: Lean principles, practices, and impacts: a study on small and medium-sized enterprises (SMEs). Ann. Oper. Res. 241, 457–474 (2012)CrossRefGoogle Scholar
  3. 3.
    Schulze, M., Seuring, S., Ewering, C.: Applying activity-based costing in a supply chain environment. Intern. J. Prod. Econ. 135(2), 716–725 (2012)CrossRefGoogle Scholar
  4. 4.
    Maiga, A.S.: Advances in accounting, incorporating advances in international accounting assessing self-selection and endogeneity issues in the relation between activity-based costing and performance. Int. J. Cardiol. 30(2), 251–262 (2014)Google Scholar
  5. 5.
    Zhang, X., Lee, C.K.M., Chen, S.: Supplier evaluation and selection: a hybrid model based on DEAHP and ABC. Int. J. Prod. Res. 50(7), 1877–1889 (2012)CrossRefGoogle Scholar
  6. 6.
    Dyk, J.V., Zubizarreta, E., Lievens, Y.: Cost evaluation to optimise radiation therapy implementation in different income settings: a time-driven activity-based analysis. Radiother. Oncol. 125(2), 178–185 (2017)CrossRefGoogle Scholar
  7. 7.
    Taha, S., Mortaji, H., Bagherpour, M., Mahdavi, M.: Fuzzy time-driven activity-based costing. Eng. Manage. J. 25(3), 63–73 (2018)Google Scholar
  8. 8.
    Zaini, S.N.A.M., Abu, M.Y.: A review on time-driven activity based costing system in various sectors. J. Mod. Manuf. Syst. Technol. 2, 15–22 (2019)Google Scholar
  9. 9.
    Stout, D.E., Propri, J.M.: Implementing time-driven activity-based costing at a medium-sized electronics company. Manage. Acc. Q. 12(3), 1–11 (2011)Google Scholar
  10. 10.
    Abu, M.Y., Jamaludin, K.R., Zakaria, M.A.: Characterisation of activity based costing on remanufacturing crankshaft. Int. J. Autom. Mech. Eng. 14(2), 4211–4224 (2017)CrossRefGoogle Scholar
  11. 11.
    Kamil, N.N.N.M., Abu, M.Y.: Integration of Mahalanobis-Taguchi System and activity based costing for remanufacturing decision. J. Mod. Manuf. Syst. Technol. 1, 39–51 (2018)Google Scholar
  12. 12.
    Abu, M.Y., Nor, E.E.M., Rahman, M.S.A.: Costing improvement of remanufacturing crankshaft by integrating Mahalanobis-Taguchi system and activity based costing. In: IOP Conference Series: Materials Science and Engineering, vol. 342, pp. 1–10 (2018)CrossRefGoogle Scholar
  13. 13.
    Zheng, C.W., Abu, M.Y.: Application of Activity based Costing for Palm Oil Plantation. J. Mod. Manuf. Syst. Technol. 2, 1–14 (2019)Google Scholar

Copyright information

© Springer Nature Singapore Pte Ltd. 2020

Authors and Affiliations

  • Filzah Lina Mohd Safeiee
    • 1
  • Mohd Yazid Abu
    • 1
    Email author
  • Nik Nurharyantie Nik Mohd Kamil
    • 1
  • Nurul Farahin Zamrud
    • 1
  1. 1.Faculty of Mechanical and Manufacturing EngineeringUniversiti Malaysia PahangPekanMalaysia

Personalised recommendations