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Characterisation of activity based costing on remanufacturing crankshaft

Traditional cost accounting applied by most remanufacturing industries assumes that manufacturing overheads are driven by the volume of production. However, this would not give a good measure of the actual manufacturing cost per unit because the overheads should actually be apportioned over the numb...

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Main Authors: Abu, M. Y., Jamaludin, K. R., Zakaria, M. A.
Format: Article
Language:English
Published: Universiti Malaysia Pahang 2017
Subjects:
T Technology (General)
Online Access:http://eprints.utm.my/id/eprint/76330/1/KRJamaludin_CharacterisationofActivityBasedCosting.pdf
http://eprints.utm.my/id/eprint/76330/
https://www.scopus.com/inward/record.uri?eid=2-s2.0-85038631837&doi=10.15282%2fijame.14.2.2017.8.0337&partnerID=40&md5=94d7083e56109e76e55de6944dd56a5a
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spelling my.utm.763302018-06-29T22:03:26Z http://eprints.utm.my/id/eprint/76330/ Characterisation of activity based costing on remanufacturing crankshaft Abu, M. Y. Jamaludin, K. R. Zakaria, M. A. T Technology (General) Traditional cost accounting applied by most remanufacturing industries assumes that manufacturing overheads are driven by the volume of production. However, this would not give a good measure of the actual manufacturing cost per unit because the overheads should actually be apportioned over the number of activities that are required to perform. Eventually, the cost of remanufactured crankshaft becomes obviously incorrect while the profitability becomes vague. The aim of this work is to estimate the cost of remanufactured crankshaft using activity based costing. The overhead costs are apportioned to activity drivers in accordance with the way resources are consumed and then, the overhead costs are apportioned from each activity driver to each cost object in proportion to the amount of the cost driver consumed by the product. The proposed method is validated by an industrial practitioner and expected to be able to serve as a useful approach because it produces a cost with accurate allocation of overhead, provides cost information on the cost drivers and produces accurate manufacturing cost and profitability information. This work is also supported by the Ministry of International Trade and Industry of Malaysia by proposing accurate allocation of overhead to strengthen the national remanufacturing policies for the development of remanufacturing industries as these industries need to sustain their end of life products. Universiti Malaysia Pahang 2017 Article PeerReviewed application/pdf en http://eprints.utm.my/id/eprint/76330/1/KRJamaludin_CharacterisationofActivityBasedCosting.pdf Abu, M. Y. and Jamaludin, K. R. and Zakaria, M. A. (2017) Characterisation of activity based costing on remanufacturing crankshaft. International Journal of Automotive and Mechanical Engineering, 14 (2). pp. 4211-4224. ISSN 2229-8649 https://www.scopus.com/inward/record.uri?eid=2-s2.0-85038631837&doi=10.15282%2fijame.14.2.2017.8.0337&partnerID=40&md5=94d7083e56109e76e55de6944dd56a5a
institution Universiti Teknologi Malaysia
building UTM Library
collection Institutional Repository
continent Asia
country Malaysia
content_provider Universiti Teknologi Malaysia
content_source UTM Institutional Repository
url_provider http://eprints.utm.my/
language English
topic T Technology (General)
spellingShingle T Technology (General)
Abu, M. Y.
Jamaludin, K. R.
Zakaria, M. A.
Characterisation of activity based costing on remanufacturing crankshaft
description Traditional cost accounting applied by most remanufacturing industries assumes that manufacturing overheads are driven by the volume of production. However, this would not give a good measure of the actual manufacturing cost per unit because the overheads should actually be apportioned over the number of activities that are required to perform. Eventually, the cost of remanufactured crankshaft becomes obviously incorrect while the profitability becomes vague. The aim of this work is to estimate the cost of remanufactured crankshaft using activity based costing. The overhead costs are apportioned to activity drivers in accordance with the way resources are consumed and then, the overhead costs are apportioned from each activity driver to each cost object in proportion to the amount of the cost driver consumed by the product. The proposed method is validated by an industrial practitioner and expected to be able to serve as a useful approach because it produces a cost with accurate allocation of overhead, provides cost information on the cost drivers and produces accurate manufacturing cost and profitability information. This work is also supported by the Ministry of International Trade and Industry of Malaysia by proposing accurate allocation of overhead to strengthen the national remanufacturing policies for the development of remanufacturing industries as these industries need to sustain their end of life products.
format Article
author Abu, M. Y.
Jamaludin, K. R.
Zakaria, M. A.
author_facet Abu, M. Y.
Jamaludin, K. R.
Zakaria, M. A.
author_sort Abu, M. Y.
title Characterisation of activity based costing on remanufacturing crankshaft
title_short Characterisation of activity based costing on remanufacturing crankshaft
title_full Characterisation of activity based costing on remanufacturing crankshaft
title_fullStr Characterisation of activity based costing on remanufacturing crankshaft
title_full_unstemmed Characterisation of activity based costing on remanufacturing crankshaft
title_sort characterisation of activity based costing on remanufacturing crankshaft
publisher Universiti Malaysia Pahang
publishDate 2017
url http://eprints.utm.my/id/eprint/76330/1/KRJamaludin_CharacterisationofActivityBasedCosting.pdf
http://eprints.utm.my/id/eprint/76330/
https://www.scopus.com/inward/record.uri?eid=2-s2.0-85038631837&doi=10.15282%2fijame.14.2.2017.8.0337&partnerID=40&md5=94d7083e56109e76e55de6944dd56a5a
_version_ 1643657280241008640
score 13.211869

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