Abstract
This paper deals with two new approaches to cost accounting: Time-Driven Activity-Based Costing (TDABC) and Value Stream Costing (VSC). First, the paper introduces both methods, focusing on TDABC. Next, we analyse the experience of an auto parts manufacturer who shifted from ABC to TDABC. Finally, we test how both methods work in a multiproduct/multi-process manufacturing environment adapted from reality, and we compare them. Although their aims are very different, they yield similar results.
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Notes
- 1.
In this example, we only develop equations for the activities that would need more than one cost driver because of their variability.
- 2.
The cost of assembly is 24,888.88 €. Therefore, the cost per labour hour (which is the cost driver) is 160 €/hour.
References
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© 2012 Springer-Verlag London Limited
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Ruiz de Arbulo, P., Fortuny, J., García, J., Díaz de Basurto, P., Zarrabeitia, E. (2012). Innovation in Cost Management. A Comparison Between Time-Driven Activity-Based Costing (TDABC) and Value Stream Costing (VSC) in an Auto-Parts Factory. In: Sethi, S., Bogataj, M., Ros-McDonnell, L. (eds) Industrial Engineering: Innovative Networks. Springer, London. https://doi.org/10.1007/978-1-4471-2321-7_14
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DOI: https://doi.org/10.1007/978-1-4471-2321-7_14
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