Activity based costing model for inventory valuation

Chouhan, Vineet; Soral, G.; Chandra, B.

doi:10.5267/j.msl.2016.12.003

Cited by 11 publications

(8 citation statements)

References 12 publications

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“…After conducting research literature analysis on the topic of business evaluation systems (Tangen, 2004, Gimžauskienė, 2007, Christauskas et al, 2009, Cardinaels et al, 2010, Adomavičiūtė, 2011, Peleckis et al, 2013, Bajus et al, 2014, Makutėnaitė et al, 2014, Bititci, 2015, Kučinskienė et al, 2015, Bhasin, 2017, Chouhan, 2017, the authors suggest the classification scheme of performance evaluation methods (see Figure 1), where the methods are classified into smaller groups according to method contents and performance evaluation purpose. According to this scheme, performance evaluation methods are first of all classified into traditional and modern ones.…”

Section: Comparison Of Modern Company Performance Evaluation Methodsmentioning

confidence: 99%

“…Source: made by the authors based on Tangen, 2004, Gimžauskienė, 2007, Christauskas et al, 2009, Cardinaels et al, 2010, Adomavičiūtė, 2011, Peleckis et al, 2013, Bajus et al, 2014, Makutėnaitė et al, 2014, Bititci, 2015, Kučinskienė et al, 2015, Bhasin, 2017, Chouhan, 2017 The International Journal ENTREPRENEURSHIP AND SUSTAINABILITY ISSUES ISSN 2345-0282 (online) http://jssidoi.org/jesi/ 2018 Volume 6 Number 1 (September) http://doi.org/10.9770/jesi.2018.6.1(10)…”

Section: Fig1 Classification Scheme For Performance Evaluation Methodsmentioning

confidence: 99%

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Comparative analysis of company performance evaluation methods

Narkunienė

Ulbinaitė

2018

JESI

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The evaluation of a company's performance is an integral part of the management of every company, which allows determining the impact of business management decisions on the performance results, as well as the direction of the results and the decisions that need to be made to improve them. Traditionally, a company's performance is evaluated on the basis of an analysis of financial performance indicators, but it is noted that in today's dynamic business environment the timely control of the performance is crucial, thus, there is an increasing attention on non-financial performance indicators. The aim of the article is to investigate and compare the modern methods for company performance evaluation that are based on the analysis of financial and non-financial performance indicators. The research is carried out using systematic analysis of scientific literature, comparison, and aggregation methods. First of all, the article unfolds the essence of the concept of the company performance evaluation and highlights the differences between traditional and modern performance evaluation systems. Moreover, the advantages of non-financial performance indicators are compared with financial indicators. Furthermore, a classification scheme for performance evaluation methods is provided; by identifying their main advantages and disadvantages the most popular and widely used modern performance evaluation methods are overviewed: economic value added method, balanced scorecard, performance prism, performance pyramid, six-sigma model and multi-criteria company performance evaluation method. Finally, according to certain criteria, a comparative analysis of the latter methods is performed. The comparative analysis confirms that non-financial performance indicators complement financial indicators; therefore, in the process of a company's performance evaluation, modern performance evaluation methods, combining financial and non-financial performance indicators and allowing the performance to be evaluated both quantitatively and qualitatively, should be used. However, there is no single method that would be appropriate for all companies, so further work can be targeted at establishing a multi-criteria performance evaluation method that would satisfy the needs of a particular business' activity and targets for evaluation.

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Section: Comparison Of Modern Company Performance Evaluation Methodsmentioning

confidence: 99%

Section: Fig1 Classification Scheme For Performance Evaluation Methodsmentioning

confidence: 99%

Comparative analysis of company performance evaluation methods

Narkunienė

Ulbinaitė

2018

JESI

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“…[8] developed a distinctive pattern of crankshaft and identify the critical and non-critical parameter of crankshaft based on the Mahalanobis Taguchi System (MTS), then applied the ABC as a method of estimation for the re-manufacturing cost of crankshaft to prove that the integration of MTS-ABC was interesting. According to [9], the ABC model is used to improve the overhead management system significantly by providing the best management decision-making information. If a company or organization that manufactures a variety of products has more than one variant, in this case the cost of multiple indirectly involved in valuation and valuation should be based on inventory, the implementation of ABC is more accurate [10].…”

Section: Introductionmentioning

confidence: 99%

Assessment the Unused Capacity Using Time Driven Activity Based Costing in Automotive Manufacturing Industry

Ghani¹,

Zaini²,

Abu³

2020

JMMST

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Automotive Manufacturing Industry usually known implementing all six sigma method and lean manufacturing. However, actual practicality in the world of manufacturing, there are a lot of factors contributes that become the challenge to the ideal of lean production line. Not exclude those factors, there is no methods to identify the possible lost cost by the factors. This research is to identify the used-and un-used capacity exist in production line that considering factors affecting the production line at real time. Time-driven activity-based costing (TDABC) is identified as one of the powerful tools to analyze the actual condition of production. Cost-driver rate is defined in Phase 3 where the highest capacity cost rate calculated is RM0.67 per minutes which involving Station 3, Station 5, Station 7 and Station 8. The least capacity cost rate is RM0.33 per minutes recorded by Station 0(Preparation), Station 2 and Station 6. Ten time equations for each station at trim line is developed. During the development of time equation, criticality of Station 7 when it became the only station affected with all thirteen factors listed can be seen as station that needed focus for improvement or target for lean manufacturing. In regards of the relevancy of applying Time-Driven Activity-Based Costing, as a whole, TD-ABC can be used to identify the estimation capacity used either over or under-used. Not only un-used capacity is identified, but result shows Station 0 is over-used by 2932 minutes equals to RM967.56. Therefore, based on the result obtained, station with over-used capacity and several stations with under-used capacity gives a clear overview to the management of the company for better investment strategy.

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“…Besides, this method also helps managers to determine the cost of products more accurately, thereby pricing products more accurately. At the same time, ABC costing-method (Chouhan et al, 2017;Amiri & Khmidi, 2019;Le & Nguyen, 2019) provides information for the firm to focus on which groups of customers and which markets are most profitable for the firm to increase competitiveness. This is important for firms to rely on information about the estimated costs allocated to corporate resource users.…”

Section: Introductionmentioning

confidence: 99%

Factors affecting the application of ABC costing method in manufacturing firms in Vietnam

Tran¹,

Thao²

2020

10.5267/j.msl

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In the current market economy with fierce competition, the number of newly established businesses is increasing, but the number of businesses that are unprofitable or have low profit also accounts for a large proportion. Accordingly, one of the main reasons for low operational efficiency is an outdated management method and low-cost efficiency. Previous studies on cost management focused primarily on traditional cost methods. Different from previous studies, this study explores the relationship between the application of the cost-based method (ABC costing-method) and the improvement of business performance in manufacturing firms in Ho Chi Minh City. The authors conducted quantitative research by analyzing the Structural equation modeling (SEM) with AMOS -SPSS with secondary data collected from the survey of managers of 620 firms. The research results show that if businesses make good use of the ABC costing-method, their business performance will be significantly improved.

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Activity based costing model for inventory valuation

Cited by 11 publications

References 12 publications

Comparative analysis of company performance evaluation methods

Comparative analysis of company performance evaluation methods

Assessment the Unused Capacity Using Time Driven Activity Based Costing in Automotive Manufacturing Industry

Factors affecting the application of ABC costing method in manufacturing firms in Vietnam

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