A Comparative Analysis and Implementation of Activity Based Costing (ABC) and Traditional Cost Accounting (TCA) Methods in an Automobile Parts Manufacturing Company: A Case Study

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Nitin Kumar & Dalgobind Mahto
Nitin Kumar & Dalgobind Mahto

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A Comparative Analysis and Implementation of Activity Based Costing (ABC) and Traditional Cost Accounting (TCA) Methods in an Automobile Parts Manufacturing Company: A Case Study Banner

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Activity based costing (ABC) is a method for determining true costs; which has become an important aspect of manufacturing/service organizations and can be defined as a methodology that measures the cost and performance of activities, resources and cost objects. It can be considered as an alternative method to traditional cost accounting systems. In this paper we have shown a comparative analysis of application of ABC method with traditional cost accounting (TCA) method in an automobile parts manufacturing company; which would like to increase the sales due to increased demand. For this reason the company needs to know the true cost of the parts prior to deciding as which item is to be produced more.

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11 Cites in Articles

References

  1. Ugo Ibusuki,Paulo Kaminski (2007). Product development process with focus on value engineering and target-costing: A case study in an automotive company.
  2. Peter Berling (2008). Holding cost determination: An activity-based cost approach.
  3. Adil Baykasog˘lu,Vahitkaplanog˘lu (2008). Application of activity-based costing to a land transportation company: A case study.
  4. Tiago Pascoal,Filomena,Francisco Jose´ Kliemann,Michael Neto,Robert Duffey (2009). Target costing operationalization during part development: Model and Int.
  5. A Gunasekaran,M Sarhadi (1998). Implementation of activity-based costing in manufacturing.
  6. Michael Johnson,Randolph Kirchain (2009). Quantifying the effects of parts consolidation and development costs on material selection decisions: A process-based costing approach.
  7. I Tatsiopoulos,N Panayiotou (2000). The integration of activity based costing and enterprise modeling for reengineering purposes.
  8. A Gunasekaran,D Singh (1999). Design of activity-based costing in a small company: A case study.
  9. James Shannon W Anderson,S Hesford,Young (2002). Factors influencing the performance of activity based costing teams: a field study of ABC model development time in the automobile industry.
  10. Michael Briers,Wai Fong Chua (2001). The role of actornetworks and boundary objects in management accounting change: a field study of an implementation of activity-based costing.
  11. Stephan Langmaak,Stephen Wiseall,Christophe Bru,Russell Adkins,James Scanlan,András Sóbester (2013). An activity-based-parametric hybrid cost model to estimate the unit cost of a novel gas turbine component.

Funding

No external funding was declared for this work.

Conflict of Interest

The authors declare no conflict of interest.

Ethical Approval

No ethics committee approval was required for this article type.

Data Availability

Not applicable for this article.

nitin sharma. 2013. \u201cA Comparative Analysis and Implementation of Activity Based Costing (ABC) and Traditional Cost Accounting (TCA) Methods in an Automobile Parts Manufacturing Company: A Case Study\u201d. Global Journal of Management and Business Research - D: Accounting & Auditing GJMBR-D Volume 13 (GJMBR Volume 13 Issue D4): .

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Issue Cover
GJMBR Volume 13 Issue D4
Pg. 29- 37
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Crossref Journal DOI 10.17406/GJMBR

Print ISSN 0975-5853

e-ISSN 2249-4588

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v1.2

Issue date

August 6, 2013

Language

English

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Activity based costing (ABC) is a method for determining true costs; which has become an important aspect of manufacturing/service organizations and can be defined as a methodology that measures the cost and performance of activities, resources and cost objects. It can be considered as an alternative method to traditional cost accounting systems. In this paper we have shown a comparative analysis of application of ABC method with traditional cost accounting (TCA) method in an automobile parts manufacturing company; which would like to increase the sales due to increased demand. For this reason the company needs to know the true cost of the parts prior to deciding as which item is to be produced more.

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A Comparative Analysis and Implementation of Activity Based Costing (ABC) and Traditional Cost Accounting (TCA) Methods in an Automobile Parts Manufacturing Company: A Case Study

Nitin Kumar & Dalgobind Mahto
Nitin Kumar & Dalgobind Mahto

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