Usability of Time Driven Activity Based Costing Methods in the Budgeting Process of SMEs

Abstract

In this study budget and cost calculations, which can be applied by producer Small and Medium-sized Enterprises (SME), have been emphasized to contribute producer SME's having longer lifespans in today's conditions of high competition. Nowadays when we act on the fact that the budget and cost calculations are inadequate in SMEs, it is intended to be a useful work that can be implemented and contribute to the achievement of the objectives to managers. In the studies carried out, it is overemphasized on the interrelated studies of budget, product based costs and production targets (productivity). In product-based cost calculations, the most up-todate approach in the distribution of manufacturing overhead costs was made using the Time-Driven Activity Based Costing (TDABC) method. In consequence of the application study, the idle capacity was determined and the productivity results were obtained with the improvement studies. Finally, the findings were interpreted and the suggestions were made.

Factors Affecting Small and Medium Enterprises’ Financial Sustainability in South Africa

“…For example, a systematic budgeting process would analyse the performance of small and medium-sized companies by including real and budgeted performance, which in turn could have a positive effect on SMEs (Meric and Gersil, 2018). In addition, budgetary engagement increases the administrative efficiency of small and medium-sized businesses and improves sharing and knowledge exchange at all levels of management.…”

“…Financial viability makes and assesses what improvements need to be made to produce more benefit, the amount of funds needed as an investment or working capital, whether the investment carried out will repay the amount, and so on (Muharam and Tarrazon, 2017). By taking decisions according to the current financial situation, budgeting allows an SME to seek ideas and dreams for the future and offers an idea to explore new goods in the market by minimising costs and assessing the financial risks (Meric and Gersil, 2018).…”

Time-Driven Activity-Based Costing in the Assembly Industry

“…= 0 + 1 * 1 + ⋯ + * where 0 is the standard time for performing the basic activity 1 … is the time for the additional activities 1 … are the frequencies for the additional activities (1) Time equations allow understanding with detail the dynamic of operational processes (Meric and Gersil, 2018). In addition, this costing system enables the recognition of idle capacity or inefficiency in the use of resources, where the resources consumed are allocated to the product instead of the performing ones (Tse and Gong, 2009).…”

“…Traditional volume-based costing systems have received numerous criticisms resulting from the arbitrary allocation of indirect manufacturing costs. Due to their nature, they cannot be easily quantified individually about the object of charge, unlike raw material and direct labor (Meric and Gersil, 2018). This drawback causes a substantial bias in the information concerning production costs (Santana et al, 2017).…”

Budgeting and Gender: Employees and Self‐Employed

“…This research reports on a comparison between self‐employed individuals and employees, and by gender, the antecedents of the decision to maintain a household budget. Budgeting is an effective control mechanism that informs financial decision‐making and reduces risks (Meric & Gersil, 2018). Yet a high proportion of individuals, business owners, and employed persons do not maintain a household budget (Armitage, Webb, & Glynn, 2016; Ross, Laing, & Parle, 2015): fewer than 50% of respondents to the 2019 Canadian Financial Capability Survey have a budget (Financial Consumer Agency of Canada [FCAC], 2019).…”