Applying activity‐based costing approach for construction logistics cost analysis

One of unique characteristics of Thai jasmine rice is its aroma, which can easily reduce in various conditions during post-harvesting activities, especially in rice milling stage. This study aims to investigate logistics cost analysis of the rice mill of Kasetwisai Agricultural Cooperative, Ltd. by using activity based costing (ABC) method and to define key activities for the improvement of the rice aroma loss reduction. The results show that the activity that has the highest logistics cost is warehousing at 26.52%, followed by material handling at 24.27%, transportation at 12.33% and packaging at 10.84% of the total logistics cost, respectively. The total logistics cost per unit of the rice mill is about 4.52 baht/kg. Findings from an in-depth interview revealed that warehousing and transportation can be major activities influencing aroma loss in jasmine rice. To reduce the aroma loss in a cost effective way, the Kasetwisai Agricultural Cooperative, Ltd. should focus on storage time and temperature in warehousing and transportation systems. In addition, the collaboration of the rice miller with supply chain partners should be encouraged to cut the logistics cost and to improve the quality of rice. Keywords: Activity Based Costing; Aromatic Rice; Jasmine Rice; Logistics Cost; Value Chain

PurposeThe paper aims to examine the activity‐based costing (ABC) method as a feasible and appropriate tool for the casino and hotel industry to apply to support kitchens in order to eliminate the monthly allocation of overhead based on variable costs.Design/methodology/approachData were collected at a support kitchen in a Las Vegas casino. These data were analyzed by using ABC methods and establishing ABC costs. ABC methods were compared to traditional allocation methods to determine, first, if allocations could be eliminated entirely; and, secondly, to establish if some outlets would be significantly impacted by the accounting change.FindingsAn ABC approach can be applied to support kitchens and total cost (ABC) can be estimated. This approach allowed the casino to eliminate traditional allocation methods based solely on food cost.Research limitations/implicationsABC was shown to be a powerful technique that can be applied effectively in a support kitchen of a casino. Since this paper involved only a single support kitchen in a single casino, further research should be conducted to confirm that ABC can also be applied in support kitchens in other hospitality industry settings.Practical implicationsThe use of ABC techniques confirmed that the ABC process is a useful tool in an effort to abolish allocations and can be applied to the remaining support kitchens. Without the benefit of this paper, restaurant management for individual food and beverage outlets received an unfair share of the overhead and did not have appropriate cost information for bread products.Originality/valueABC may be a powerful technique when applied effectively to the food and beverage operations in the field of hospitality.

Pariaman is a city in West Sumatra with many residents whose livelihoods are in the fisheries sector. Usaha Perikanan Mandiri Muaro Cinto (UPMMC) located in the Pariaman area faces challenges in managing logistics costs. This MSME has not been able to identify the components of the logistics costs of the business they run so business improvement strategies have not been formulated considering that key activities along the supply chain have not been mapped. Therefore, a logistics cost analysis was conducted for the UPMMC fish supply chain using the activity-based costing method. Several actors in the supply chain observed include suppliers, distributors, manufacturers/retailers, and customers. Based on the calculations carried out, it is known that the largest costs are in procurement activities, especially in fishing operations with a proportion of 33.15%. In addition, it is also known that shipping costs have a proportion of 32.93% or equivalent to IDR 2,143 per kg of tuna while packaging costs take a proportion of 19.98% of the total logistics costs.

Micro, small and medium enterprises play a crucial role in the Indonesian economy, in this case the application of the Activity Based Costing method in MSMEs, especially in the West Nusa Tenggara region, is still limited. This study aims to analyze the application of the Activity-Based Costing (ABC) method in determining the cost of goods manufactured (HPP) at the Tenun Dina MSME located in Ntobo Village, Bima City. The Tenun Dina MSME still uses the traditional costing method which divides the total cost equally, without considering the real activities in the production process. This approach often produces less accurate figures. The method used in this study is quantitative descriptive by conducting direct observations in the field and the data used in this study are primary data. This study found that the ABC method provides more accurate results and reflects production costs more precisely, which is IDR 345,300 per unit. Meanwhile, the traditional method only produces a HPP of IDR 292,000 per unit because it does not cover all cost components. This difference shows that the ABC approach is more effective in describing the actual cost conditions.

Abstract. Introduction. Ensuring the effective functioning of a modern enterprise is largely determined by the procurement process, which significantly affects the stability, efficiency and competitiveness of the enterprise. Purpose. The purpose of this study is to determine the key features of the supply process and its goals in the chain of circulation of economic assets, as well as to characterize the accounting component of the supply activity. Results. The supply process, in addition to the actual purchase of values, includes all interrelated activities necessary for the organization to receive goods and services from suppliers: the selection of suppliers, negotiations and agreement of terms with them, transportation and forwarding of goods and material values, receiving, warehousing and cargo processing goods Thus, it can be said that there is no coherent and unified opinion on the definition of the terms "supply", "purchase" and "supply" today, and they are perceived in practical activity as interchangeable. Implementation of supply activities can be considered in two aspects - tactical and strategic. Supply in the tactical aspect is the satisfaction of the company's constant, daily needs for material resources, without which its effective functioning is impossible. The strategic aspect of supply activities is actually the process of management, communication and interaction with other departments, external suppliers, needs and requests of the end user. Accounting for supply costs is reduced to an important, but only effective part of the supply process - the assessment of material stocks at original cost (the actual cost of acquisition or own production). Material costs are one of the main economic elements of the enterprise's costs for the production and sale of products, they include the cost of purchased raw materials and materials that are part of the manufactured product, forming its basis, or are a necessary component in the production of products (conducting works, providing services ). The integration of production and procurement activities begins long before the production process itself. At the same time, the initiative side is the production system, the basis of which is data on product sales. However, the production process cannot proceed normally if it is not preceded by a well-established process of preparing production stocks. Reserves refer to objects that require fairly large investments and are one of the most important factors in ensuring stability and continuity of reproduction, which determine the company's policy and affect the level of service as a whole. Production units receive information about the availability of the necessary amount of materials for production. In the chain of creation of the value of material costs at the stage of production, deficiencies and losses arising as a result of procurement and supply activities may be detected. For example, if high production losses were caused by the purchase of the wrong material by the supply department, then the amount of these losses should be attributed to the costs of the responsibility centre of the supply department in terms of quantity and value. Production divisions complete the material and value flows of purchasing and supply activities. At this stage, the physical consumption of materials is carried out according to the value formed as a result of the material and technical supply process. Conclusions. Logistics costs significantly affect the profitability of the city's enterprise and its finished products. Therefore, the clear structuring of logistics costs can contribute to the optimization of purchasing activities in the production of industrial equipment, as well as the coordination and integration of certain types of logistics costs that are hidden and do not have a clear method of accounting and measurement. In general, it can be said that the implementation of successful and effective procurement activities at a manufacturing enterprise must be approached systematically and comprehensively, organically integrating all the main functions of procurement logistics (planning, organization, motivation) into all internal business processes of the enterprise, providing this activity with the necessary resources, information and managerial influence.

According to extensive defects of China's tobacco business enterprises logistics cost control, using activity-based costing from the three latitudes: prior control, inprocess control, after control to design the logistics cost control system of tobacco business enterprise, to realize the work division and activity cost control of the whole logistics process of the tobacco business enterprises. And it’s more conducive for the tobacco business enterprises to control logistics cost, enhance competitiveness in the overall the angle.

This study aims to (1) Analyze the actual unit cost value for the competence of Vocational High Schools (SMK) welding engineering expertise using conventional calculation methods. (2) Analyze the actual unit cost value for SMK welding technique expertise competence with the Activity Based Costing (ABC) method. (3) Analyze the ideal unit cost value for vocational welding engineering expertise competence. (4) Analyze the effectiveness of education budget management in the learning process of SMK Welding Engineering. The research used is a mixed type that uses a sequential exploratory model. In the first stage, qualitative methods are followed by quantitative methods, emphasizing quantitative methods. Qualitative methods at the beginning classify school operating costs and identify school activities and resources that incur costs for school activities, while the quantitative method for calculating the unit cost of education uses the Activity Based Costing (ABC) approach. This study aims to determine how much each student costs yearly to learn welding engineering skills. This research was carried out at SMKN 1 Tanjunganom Nganjuk, the only State Vocational School with the status of SMK Center of Excellence in Welding Engineering Expertise Competencies. The study results are as follows: (1) The calculated unit costs/real unit costs per year per welding engineering student based on conventional calculations at SMKN 1 Tanjunganom are Rp. 3,593,558. (2) The calculated unit costs/real unit costs per year per welding engineering student at SMKN 1 Tanjunganom, based on the Activity-Based Costing (ABC) method, are Rp. 4,242,686 for class X, Rp. 4,203,831 for class XI, and Rp. 4,861,468 for class XII. (3) Rp is The calculated ideal unit cost per year per welding engineering student at SMKN 1 Tanjunganom based on the curriculum and RKAS. 4,512,200 for class X, Rp. 5,496,771 for class XI, and Rp. 5,506,018 for class XII. (4) The effectiveness of using the education budget in the welding engineering e-learning process at SMKN 1 Anjunganom can meet the learning objectives of SMK, which can prepare students to enter the workforce as much as 35% or 71 students; continuing to higher education as much as 15% or 30 students; and able to choose jobs, compete and develop themselves 50% or 101 students out of a total of 203 welding engineering students in 2023.

Integrating information about the cost of carbon through activity-based costing

With the development of society, market competition becomes increasingly fierce, companieswant to achieve stable development and efficient profits, strengthen its internal managementand cost control are important measures to enhance the economic efficiency of enterprises. In business management and cost control, statistical work plays an important role, which cannot only reduce the operating costs in enterprise management, clarify receipts and disbursements of enterprise, while also has an important significance for improving enterprise management and cost control quality, and promoting the healthy development of enterprises. This study analyzes the development cost control situation of enterprise, the application of statistics in business management and cost control, and finally with examples to have detailed in-depth analysis of the statistical applications in business management and cost control, for reference.

Logistics is a one of the common function that companies usually outsourced. The decision to keep this function in-house or contract with one or many third-party logistics (3PL) companies is entirely strategic and can dramatically impact any organization's bottom line. 3PL users report an average of 44% of their total logistics expenditures are related to outsourcing. 72% of firms are increasing their use of outsourced logistics services in 2015, which is up slightly from the average reported in recent years. Most developed outsourcing logistics market belongs to the U.S. with 88%. It is followed by Asia 48%, and Europe – 46% (O’Reilly, 2010). In Italy some industries can reach the 70%, in particular food, groceries and fashion (Osservatorio Contract Logistics del Politecnico di Milano). There are many researches about logistics and large enterprises. There are less studies about Small and medium-sized enterprises (SMEs) and logistics outsourcing. SMEs play a major role in the Italian economic system. Their business activities have become an important component of the Italian economy. This paper aims to depict the adoption level of outsourcing by Italian SMEs. By direct interviews to 28 companies’ representatives we investigate which services or processes are outsourced. We investigate the reasons why companies adopt or don’t adopt the externalization. Moreover, for every company we calculate the logistics costs of simple logistics processes. In effect, we wish to compare the logistics costs communicated by the firms and the same costs calculated with ABC (Activity Based Cost) model. This research demonstrate that SMEs adopt 3PLs only for transportation. SMEs do not know all the logistics services offered by 3PLs and SMEs think the services are dedicated only to large enterprises. Finally, many companies are not able to calculate logistics costs, then they cannot compare a 3PL offer with their real costs.

The subject of this paper is to analyze the advantages and disadvantages of Activity-Based Costing (ABC) in relation to the classical cost accounting methods. Traditional cost accounting methods were created in a time when direct costs of labor and materials were the dominant factors of production and when changes in technology and consumer demand were not so rapid. Allocation of indirect costs, which could not be directly linked to specific products, was based on specific keys: produced volume of different products, direct material costs, direct labor costs and so on. The problem of the traditional cost accounting became evident when the indirect costs (such as maintenance, insurance, production preparation, etc.) reached significant amount or even exceed the direct costs. In terms of producing multiple products, traditional cost accounting methods may underestimate the small batches production cost per unit and overestimate the mass production cost per unit. In response to these concerns, during the 1980s in United States was created Activity-Based Costing. The conceptual frame of ABC is based on the activities of the company, which can be differentiated in various ways - the primary and secondary, activities that add value and those that do not add value. ABC is a costing methodology that identifies activities in an organization and assigns the cost of each activity with resources to all products and services according to the actual consumption by each. ABC is generally used as a tool for understanding product and customer cost and profitability based on the production or performing processes. As such, ABC has predominantly been used to support strategic decisions such as pricing, outsourcing, identification and measurement of process improvement initiatives. In evaluation of the advantages and disadvantages of ABC, there will be used methodology methods such as: quantitative method of comparison, the method of key business processes observation in the enterprise, as well as the inductive method. The main objective of this paper is to define a model of activity-based costing in specific conditions of agricultural production and assess its practical significance for cost management process improvement. The results of this research will indicate that the application of ABC in agriculture enterprises can improve the accuracy of cost per unit calculation. However, it should be based on careful cost benefit analysis. Development of ABC could be expensive and implementation could be difficult.

One of the most promising strategies for reducing truck traffic in urban centers is the consolidation of consignments through cooperation and coordination among multiple businesses. However, various factors—including existing infrastructure systems, institutional and regulatory environments, socioeconomic and geographical characteristics, political climates, past and future changes in logistics and supply chain management, and market forces—will determine whether such a strategy can be adopted and function effectively in the United States. In this paper, the cost-effectiveness of a common type of consolidation scheme used in foreign countries is examined against the peddle-run system commonly used in the United States. The analysis results indicate that the current U.S. distribution system has substantial cost advantages. Demographic factors, population density, and urban area size, while having some effect on the logistics cost under the consolidation system, do not reverse the cost advantage of the peddle-run system within the range tested. The advantage of the peddle-run system will not be overcome without drastic policy changes, the imposition of truck size and weight restrictions, or investments in public terminals.

Multiple-method analysis of logistics costs

To analyze the effects of activity-based costing (ABC) on the economic production quantity (EPQ) model in production-inventory system, a new EPQ model based on ABC is developed in this paper. In the new model, based on ABC perspectives, we analyze the cost drivers other than conventional ones specified in the production-inventory system, and then revise the cost functions according to these cost drivers. In this paper, numerical examples are also given to illustrate the new model by comparing with the classical EPQ model. The results show the new model is more effective than the classical EPQ model in cost control.

Shallow Versus Deep Integration Between Mediterranean Countries and the EU and Within the Mediterranean Region