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

Michel Gervais, Yves Levant and Charles Ducrocq ()
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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

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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.

Keywords: Cost Management; Idle Resources; Aggregation Error; Measurement Error; Homogeneity; TDABC (search for similar items in EconPapers)
Date: 2010
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Citations: View citations in EconPapers (11)

Published in JAMAR (THE JOURNAL OF APPLIED MANAGEMENT ACCOUNTING RESEARCH), 2010, 8 (2), pp.1-20

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:halshs-00555218

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