Quantitative Techniques Used By Marketing Costing, Time Driven Activity Based Costing Essay

1071 WordsMay 25, 20165 Pages
Abstract- In today’s competitive world, apart from a few isolated cases (e.g. luxury goods), the selling price of a product is predefined by the market because customers are not willing to pay more than a certain amount of money for the product. Hence cost is one of the most influential factors in the outcome of a product or service. Hence over the past years different costing techniques are evolved such as operation based approach, case based, break down approach, feature based costing, Activity based costing, time-driven activity based costing etc. These techniques are classified based on techniques with similar features. They are mainly classified into qualitative techniques and quantitative techniques. Qualitative cost estimation techniques are based on a comparison analysis of a new product with the products that have been manufactured previously in order to identify the similarities in the new one. Whereas the quantitative techniques are based on a detailed analysis of a product design, its features, and corresponding manufacturing processes. Therefore quantitative techniques are more preferred. Time-driven activity based costing is a relatively new tool based on quantitative technique. This article provides a comprehensive literature review of Time-Driven Activity Based Costing (TDABC), which is used to improve the cost allocation to products in manufacturing industry. This paper presents evolution of costing techniques and TDABC. It also gives detailed description

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