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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
Introduction
The ABC method, presently the preference among full costing methods, has been the subject of much criticism with regard to the methodology used (Anderson, 1995; Malmi, 1997; Gossselin, 1997; Krumwiede, 1998; Byme, et al., 2009) and some users have even abandoned it (Ness and Cucuzza, 1995). Kaplan, himself one of the main initiators of the ABC method1, acknowledged this criticism and the fact that the method was being abandoned (Kaplan and Anderson, 2007: pp. 5- 7).
With Anderson, he proposed a change to the method, the first traces of which could be found in 1998 (Cooper and Kaplan, 1998: pp. 292-296). From November 2004, a name was officially given to the method: Time Driven Activity-Based Costing (TDABC) thus presenting this new version as a method in its own right2. Kaplan and Anderson referred to the previous versions of the ABC model as "Rate-Based ABC" 3(Kaplan and Anderson, 2003), "Traditional ABC" (Kaplan and Anderson, 2004) or "Conventional ABC" (Kaplan and Anderson, 2007). In their 2004 article, TDABC is presented as a completely new approach (Kaplan and Anderson, 2004). There followed a book Kaplan and Anderson (2007) in which any relationship of TDABC to existing practices...