Comparison of the factory cost calculated by the PEU (Production Effort Units) and (Time-driven Activity-based Costing) TDABC methods: on-line case study of refrigerator production

Abstract

The study sought to answer if the PEU (Production Effort Units) and TDABC (Time-driven Activity-based Costing) costing methods, because they are based on the “time” factor of production, provide identical manufacturing unit costs. The methodology was classified as descriptive, with a qualitative approach and in the case study format. The results show that even if the percentage of participation in the final cost of the product are equal, the values of the unit cost of the manufactured items, of the total cost attributed to the objects of costing, the capacity used and the idle capacity were different in the two methods of costing. It was concluded that the difference in the values of the cost of the products was caused by the way the two methods allocate the costs. The PEU starts from the total value of the installed capacity costs of the month for the unit cost of the products, whereas the TDABC first calculates the unit cost per minute of the installed practical capacity and then calculates the cost of the items.