The Implementation of the Time-Driven Activity Based Costing Model In the Manufacturing Companies

Subject Areas : Management Accounting

سیداحمد  خلیفه سلطانی ¹ (ندارد)
مقصود  میرزایی کلانی ² (ندارد)

Received: 2012-05-09 Accepted : 2012-07-22 Published : 2013-03-09

Keywords: Time-driven activity based cos, TDABC, Traditional activity based&#x0D, &#x0D, c, Idle capacity, Traditional absorption costing,

Abstract :

This research studies and compares the results of implementation of traditionalabsorption costing model and time-driven activity based costing model(TDABC) inorder to calculating the cost of products and services in the Pasargad Polymercompany. The fundamental hypothesis of this paper states that the implementation ofTDABC model presents more relevant results than traditional absorbtion costing inthe above mentioned company. The data has been collected by library and fieldresearch methods. Then the collected data were placed in the two models and theresults of data processing were analyzed. The results show that the traditionalabsorption costing model over allocates overhead costs to the higher volume productsand services and overstates the cost of these products and services accordingly. Butthe TDABC model, the simplified one of traditional activity cased costing model,modifies the over and under overhead allocation by utilizing the time equations anddrivers and reports the cost of products and services properly.. The TDABC alsomeasures the idle capacity and its cost and can help the managers in evaluating theperformance of company's departments.