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|  | |  | | | Time-Driven Activity-Based Costing: A Simpler and More Powerful Path to Higher Profits | | | | | SKU:
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Usually ships in 1 business days | | | | | | In the classroom, ABC looks like a great way to manage a company’s resources. But many executives who have tried to implement ABC on a large scale in their organizations have found the approach limiting and frustrating. Why? The employee surveys that companies used to estimate resources required for business activities proved too time-consuming, expensive, and irritating to employees.
This book shows you how to implement time-driven activity-based costing (TDABC), an easier and more powerful way to implement ABC. You can now estimate directly the resource demands imposed by each business transaction, product, or customer. The payoff? You spend less time and money obtaining and maintaining TDABC dataand more time addressing problems that TDABC reveals, such as inefficient processes, unprofitable products and customers, and excess capacity. The authors also show how to use TDABC to link strategic planning to operational budgeting, to enhance the due diligence process for mergers and acquisitions, and to support continuous improvement activities such as lean management and benchmarking.
In presenting their model, the authors define the two questions required to build TDABC: 1) How much does it cost per time unit to supply resource capacity for each business process? 2) How much resource capacity (time) is required to perform work for a company’s many transactions, products, and customers? The book demonstrates how to develop simple, valid answers to these two questions.
Kaplan and Anderson illustrate the TDABC approach with a wealth of case studies, in diverse settings, based on actual implementations. | | | |
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| | Product Details | | Author: | Robert S. Kaplan | | Hardcover: | 288 pages | | Publisher: | Harvard Business Review Press | | Publication Date: | April 04, 2007 | | Language: | English | | ISBN: | 1422101711 | | Product Length: | 9.38 inches | | Product Width: | 6.46 inches | | Product Height: | 1.07 inches | | Product Weight: | 1.27 pounds | | Package Length: | 9.3 inches | | Package Width: | 6.1 inches | | Package Height: | 1.1 inches | | Package Weight: | 1.3 pounds | | Average Customer Rating: | based on 5 reviews |
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| | Customer Reviews | Average Customer Review: ( 5 customer reviews )
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2 of 2 found the following review helpful:
A useful model for some businesses Feb 24, 2011
By John Gibbs Activity-based costing was introduced in the 1980s to correct the inaccurate allocation of overhead from standard cost systems, but activity-based costing systems were expensive to build, complex to sustain, and difficult to modify, according to Robert Kaplan and Steven Anderson in this book. According to the authors, Time-Driven Activity-Based Costing is simpler, cheaper and more powerful.
The authors' costing model assigns resource costs directly to resource objects. Firstly, a capacity cost rate is calculated for each department or process, being the total cost of the resources used by the department or process divided by the time available from the employees conducting the work. Secondly, an estimate is made of the demand for resource capacity that each cost object requires. This makes it very easy to see how much it costs to serve a particular customer, or how much excess capacity there is in a department.
The value to a business in implementing a system of the type advocated by the authors will depend on the extent to which the activities of the business consist of standard processes and the extent of benefits gained from knowing the cost of serving individual customers. The system might be better suited to a manufacturing firm, in which the time taken for each process can be estimated accurately, than to a law firm, where the mysterious activities engaged in by attorneys might defy rational measurement.
In my opinion the main value of the book is in the first few chapters where the principles of the system are explained. The last half of the book contains a number of case studies which are likely to be of interest only to those who have businesses similar to one or more of those described in the case studies.
2 of 3 found the following review helpful:
Comprehensive guide Nov 25, 2008
By Rolf Dobelli
"getAbstract"
Activity-based costing can provide important insights; however, it also can be complex and difficult to implement and sustain. Time-driven activity-based costing more straightforwardly uses time as the primary metric for assessing costs, since almost all costs have a time dimension. Robert S. Kaplan and Steven R. Anderson provide a thorough, if highly technical, introduction to time-driven activity-based costing. Chapter by chapter, they show readers how to estimate process times, calculate capacity cost ratios, and plan and implement a TDABC system. Their detailed case studies illustrate the benefits of this clear, sophisticated tactic for budgeting, cost management, process improvement, benchmarking and acquisition evaluations. getAbstract thinks their book will be important to any executive, manager or academician who must understand operational costs.
0 of 1 found the following review helpful:
New ABC Paradigm Sep 04, 2008
By Osei Kufuor This is the book that I have been waiting for a long time. It addresses the major issues about the calculation of the resource drivers. Because it is based on linear regression model, it has a more scientific base than the previous ABC method. It can also be easily integrated into dynamic Activity-Based Costing Simulation model.
3 of 7 found the following review helpful:
TDABC - a very interesting book May 12, 2007
By Anders Schou Nielsen This book has given me a great insight in an easier way to allocate resources down to costumers and products using Time-driven cost driver rates.
However, I am a bit sceptical about the Capacity Cost rate, which seems to be the key element to this models success... especially the way the authors describes the way to calculate this rate.. But with some methodical procedure behing when implementing the model, it is possible to get good results.... that's my experience
All in all, it is a great book about the fundamentals when wanting to use TDABC in your business.
1 of 19 found the following review helpful:
Great Service May 28, 2007
By Lawrence A. Caffrey
"elgringito"
Product purchase acknowldgement was near immediate, billing timely, receipt of product within three days and the exact product ordered received. Excellent.
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