Study On Time-Driven Standard Activity-Based Costing

Cost has always been the focus of business administration, especially, for the Chinese companies in recent years. This paper has combined the Standard Costing and the Time-Driven Activity-Based Costing (T-ABC), and created a more operational and advanced cost management system, Time-Driven Standard Activity-Based Costing (T-SABC). This novel theoretic system can solve the problems that the traditional Activity-Based Costing (ABC) has and realize the concurrent and feed-forward control as well as the feedback control of the cost.The paper begins with the introduction of the history and current situation of the application of ABC, and how the T-ABC emerges, then introduces the basic knowledge of ABC and T-ABC, and how to implement them, and finally generates a novel cost management system T-SABC. The paper has focused on setting up a standard cost system for the activity centers, which is different from the traditional standard cost system and also the one based on activities that formerly proposed. This new system is based on the two parameters proposed in T-ABC: (1) Cost per Time Unit of Capacity and (2) Unit Times of Activities. With the knowledge of the Standard Costing, ABC, and T-ABC etc., and tools of statistical & analyzing technology, the paper deals with the crucial problems of the implementation of T-SABC, such as setting Standard Cost per Time Unit of Capacity, and Standard Unit Times of Activities, budget of the Activity Center, analysis of the cost variances and the bookkeeping of the cost variances.This innovative idea will benefit the further research work of the filed of Cost Management and contribute to the management of the Chinese companies. With the rapid development of science technology and the promotion of modern enterprise management, T-SABC, created in this paper, will have a promising future.