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Time-Driven Activity-Based Costing (TDABC): An Initial Appraisal through a Longitudinal Case Study

Author

Listed:
  • Michel Gervais

    (CREM - Centre de recherche en économie et management - UNICAEN - Université de Caen Normandie - NU - Normandie Université - UR - Université de Rennes - CNRS - Centre National de la Recherche Scientifique)

  • Yves Levant

    (LEM - Lille - Economie et Management - Université de Lille, Sciences et Technologies - CNRS - Centre National de la Recherche Scientifique)

  • Charles Ducrocq

    (IGR-IAE Rennes - Institut de Gestion de Rennes - Institut d'Administration des Entreprises - Rennes - UR - Université de Rennes)

Abstract

TDABC is presented by its "inventors", R. Kaplan and S. Anderson as a new method. Their aim is to respond to the criticism directed at the ABC method, mainly regarding the cost and complexity of implementing and maintaining it. Our study shows that, while TDABC offers a partial solution to these issues, it still has some inherent weaknesses. Apart from the hesitation as to whether to use standard costs or actual costs, the measurement of time, which forms the basis of the method, also appears problematic. Homogeneity and maintaining it over time have not been given much consideration either, in spite of their importance for obtaining reliable costs. There is nothing new about calculating the cost of capacity and the deviation revealed by TDABC is only a deviation in business volumes. The quality of the data processing applications remains an essential factor in alleviating the complexity of the method. When it comes down to it, the real purpose of TDABC could be to monitor labour time.

Suggested Citation

  • Michel Gervais & Yves Levant & Charles Ducrocq, 2010. "Time-Driven Activity-Based Costing (TDABC): An Initial Appraisal through a Longitudinal Case Study," Post-Print halshs-00555218, HAL.
    • Handle: RePEc:hal:journl:halshs-00555218
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    Citations

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    Cited by:

    1. Zheng-Yun Zhuang & Shu-Chin Chang, 2017. "Deciding product mix based on time-driven activity-based costing by mixed integer programming," Journal of Intelligent Manufacturing, Springer, vol. 28(4), pages 959-974, April.
    2. Morteza BAGHERPOUR, 2015. "Risky Time Driven Activity Based Costing in a Medical Center: A Development, Implementation and Simulation based Optimization Approach," The Journal of Accounting and Management, Danubius University of Galati, issue 2, pages 47-61, August.
    3. Wouters, Marc & Stecher, Julia, 2017. "Development of real-time product cost measurement: A case study in a medium-sized manufacturing company," International Journal of Production Economics, Elsevier, vol. 183(PA), pages 235-244.
    4. Tarzibashi Omar Fikrat Fateh & Ozyapici Hasan, 2019. "The Impact of the Magnitude of Overhead Costs on the Difference Between ABC and TDABC Systems," Foundations of Management, Sciendo, vol. 11(1), pages 81-92, January.
    5. Attilio Mucelli & Francesca Spigarelli & Dominique Lepore, 2018. "National Culture for a Participatory Time-driven Activity Based Costing: A Conceptual Framework and Research Agenda," International Journal of Business Administration, International Journal of Business Administration, Sciedu Press, vol. 9(2), pages 56-66, March.
    6. Nabil Bashir Al-Halabi & Yazan Mjahed Al-Mnadheh, 2017. "The Impact of Applying Time Driven Activity-Based Costing on Improving the Efficiency of Performance in Jordanian Industrial Corporations: A Survey Study," International Journal of Economics and Finance, Canadian Center of Science and Education, vol. 9(12), pages 24-31, December.
    7. Nicolas Petit & Charles Ducrocq, 2014. "Modelisation Des Couts D'Un Service De Transport Hospitalier En Tdabc," Post-Print hal-01899530, HAL.
    8. Karl Schuhmacher & Michael Burkert, 2022. "Time Is Relative: How Framing of Time Estimation Affects the Accuracy of Cost Information," Management Science, INFORMS, vol. 68(7), pages 5493-5513, July.
    9. Pashkevich, Natallia & von Schéele, Fabian & Haftor, Darek M., 2023. "Accounting for cognitive time in activity-based costing: A technology for the management of digital economy," Technological Forecasting and Social Change, Elsevier, vol. 186(PB).
    10. Salah Oraby, 2021. "A Guide to Implementation of Time- Driven Activity -Based Costing in Saudi Electronic University," International Journal of Business and Management, Canadian Center of Science and Education, vol. 16(1), pages 1-68, August.
    11. Boris Banovic & Vladimir Grebenar & Goran Pichler, 2015. "“6 Steps” For Determining Of Efficiency Of Small Entrepreneurs," Economy of eastern Croatia yesterday, today, tommorow, Josip Juraj Strossmayer University of Osijek, Faculty of Economics, Croatia, vol. 4, pages 232-238.

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