SUITABILITY OF TDABC IN FABTRONICS

MANAGERIAL ACCOUNTING
SUITABLITY OF TDABC IN FABTRONICS

Table of Contents
INTRODUCTION......................................................................................................................................2
DESCRIPTION OF THE CLIENT’S COMPANY...................................................................................3
TDABC (Time-Driven Activity-Based Costing) AND ITS FEATURES...............................................4
THE DIFFERENCE BETWEEN TDABC AND ACTIVITY-BASED COSTING AND OTHER
TRADITIONAL COSTING SYSTEM......................................................................................................6
SUITABILITY CHECK OF TDABC FOR FABTRONICS.....................................................................9
CONCLUSION AND RECOMMENDATIONS.....................................................................................11
REFERENCES........................................................................................................................................12
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INTRODUCTION
The term Costing is applied in the business organization’s accounting policy as a
method of identification of the cost of production and manufacturing of a product with
respect to the income generated by that product. The systems of costing figure out the
overhead of manufacturing and then allocate the determined overhead expenses to the
products of the organizations. There are various methods of Costing which includes the
traditional, Activity Based Costing (ABC) and Time-Driven Activity-Based Costing
(TDABC) systems. The assignment focuses on determining the suitability of TDABC for
an electronic manufacturing company, Fabtronics in which a report is prepared by a
graduate consultant of a management consultancy firm for the same. The assessment
will include the brief description of the chosen organization, Fabtronics along with the
introduction to TDABC and its features. Also, the difference between the traditional
costing methods and ABC and TDABC along with a final evaluation of whether TDABC
is suitable for Fabtronics.
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DESCRIPTION OF THE CLIENT’S COMPANY
The organization, Fabtronics is a world-class electronics manufacturing firm established
in the year 2003. The company was founded by Frank Harris and Rod Briggs who have
more than 25 years of experience in the electronics appliance manufacture industry
(Fabtronics, 2018). The company has expanded its roots in the Australian market and
has become the leading electronics manufacturing company in the country. The
company leads in manufacturing PCB electronics and the circuit boards and other
electronic components. The organization is based in Braeside, Victoria in Australia. The
firm has ISO certification has expertise in delivering high-quality electronic components
and products such as combustion control, communication and display technology
products.
Figure 1
Source: [https://electronicsnews.com.au/company/fabtronics/]
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