Application of Time Driven Activity Based Costing Method (TDABC) to Determine The Cost of Production and Business Income in PT ABC
Q Ahmada Arifin
Master of Accounting Program, Faculty of Economic and Business, University of Indonesia
Abstract
Cost of Goods Manufactured is a very important thing to calculate the selling price and profit and loss of a company. PT ABC as the main distributor of PT XYZ. This research helps PT ABC determine the Cost of Goods Manufactured which is more accurate to determine the right selling price with traditional methods and TDABC. The traditional method alocate the same value of direct and overhead labor costs for each product based on the number of units needed and provide less accurate calculations. The TDABC method provide more accurate direct labor and overhead costs by alocating the costs into each activity that has added value and the production process time for each type of product. TDABC shows that simple products have a smaller overhead allocation than products that are complicated in the production process so that undercosting or overcosting can be minimized.
Keywords: Cost of Goods Manufactured; Time Driven Activity Based Costing; Premix Seasoning; Various Product; Restaurant; Undercosting; Overcosting
Topic: Organizational and accounting system change