ACTIVITY BASED COSTING AND TIME DRIVEN A (1)

2nd International Conference on Project Evaluation
ICOPEV 2014, Guimarães, Portugal

ACTIVITY BASED COSTING AND TIME-DRIVEN ACTIVITY BASED
COSTING: TOWARDS AN INTEGRATED APPROACH
Alex Santana,1 Paulo Afonso1* and Ana Maria A. C. Rocha2
1

Research Centre for Industrial and Technology Management, University of Minho, Portugal
2
Algoritmi Research Centre, University of Minho, Portugal

* Corresponding author: psafonso@dps.uminho.pt, University of Minho, Campus of Azurém, 4800-058, Guimarães, Portugal

Therefore, the aim of this article is to discuss TDABC from
a critical analysis of the literature, checking and comparing
methodologies and research techniques, as well as
contributions to mitigate the difficulties encountered in
implementing the model. As a result, it is an established
relationship between ABC and TDABC.
This article is divided into, with introduction, concepts

necessary for a proper understanding of the study. Then,
the methodology used to develop the research is described.
Subsequently, the results are displayed and discussed.
Finally, the concluding remarks are outlined.

KEYWORDS
Cost Management, Activity Based Costing, Time-Driven
Activity Based Costing,
ABSTRACT
Activity Based Costing (ABC) methods and models have
been presented in the literature as sophisticated approaches
for cost management and costing purposes. Kaplan and
Norton’s Time-Driven Activity Based Costing (TDABC)
represented an update or improvement of the initial ABC
models proposed by Cooper and Kaplan. The relevance
and applicability of the TDABC approach is still an open
question. The purpose of this paper is to discuss TDABC
from a critical analysis of the literature, checking and
comparing methodologies and research techniques, as well
as contributions to mitigate difficulties encountered in the

implementation of the model. As a result, it is established a
relation between ABC and TDABC approaches and an
integrated TDABC-ABC model and methodology is
proposed. Some ideas for future work and management
implications are also discussed.

STATE OF THE ART
Activity Based Costing
The ABC or Activity Based Costing enables a detailed
analysis of the costs of a product, giving attention to the
activities and processes that characterize the organization's
business (Swenson, 1995). ABC is a particularly
appropriate methodology to deal with complex and diverse
manufacturing systems (Afonso and Paisana, 2009), which
allows support strategic decision making at the level of
three distinct areas: the definition of the price of the
products, the production mix and the development and
design of new products (Mitchell & Innes, 1998).
Regarding the production mix, ABC allows to measure the
cost and performance of activities and cost objects, based

on three basic premises: products require activities,
activities consume resources and resources cost money
(Afonso, 2002). Conceptually Kaplan (1984) summarizes
these assumptions: the various activities consume
resources and products, in turn, consume activities.
As this methodology assumes that not all costs can be
related to production volume or the volume of direct use of
resources, these are treated more strictly (Afonso, 2002),
thus making the overhead on an element more noticeable,
ie makes the chargeable overhead (Tippett & Hoekstra,
1993). ABC is assumed to improved precision with respect
to the product cost when compared to traditional systems
(Tsai, 1996).
However, the ABC system is often viewed as a system of
high cost of development, relatively complex and difficult
to be modified or adapted which often leads to be non-used
(Stouthuysen, Swiggers, Reheul & Roodhooft, 2010).
Cucuzza and Ness (1995) state that many companies have
adopted and explored the feasibility of ABC, however,
they found that less than 10 % have used it to support the

management of its operations, and that the other 90 % have

INTRODUCTION
Studies addressing a critical analysis of the literature are a
kind of research often used to survey the quantity and
quality of articles on a topic that is considered relevant to a
particular area. This type of study is important because it
maps the authors involved, in turn, researchers are
contributing to promote science. The theme Activity Based
Costing (ABC) and Time-Driven Activity Based Costing
(TDABC) will help to verify how the studies are being
discussed within the academy, as it makes the survey of the
area, through the themes addressed in the research.
The ABC is a costing system based in activities, that
arose as a consequence of the recognition that
traditional systems no longer met the new practices of
companies, requiring adaptation to new market
conditions and assuming a new cost structure. However,
in an attempt to reduce some limitations of ABC, Kaplan
and Anderson (2004) propose another approach to this

methodology: Time-driven ABC (TDABC). This approach
uses new tools, such as the time equations (equations time).
Additionally, among other innovations, eliminates the need
to carry out interviews with staff, which would serve to
assess what activities they work for a period.

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stagnated or dropped their use in the enterprise, due to the
difficulty of training and employee engagement on the
potential of the tool.
Kaplan and Anderson (2004 ) recognized the limitations of
the method and understood that criticism was justified by
the following factors: (i) high investment to implement the
method, (ii) complexity to keep it in the company and (iii)
difficulty to modify when needed.

necessary that they are equal, since the model allows the

estimation of several times depending on the specific
characteristics of each application using dummy variables
and equations.
Differences between ABC versus TDABC
The differences between the steps for the implementation
of ABC and TDABC models are presented in Table 1.
(Source: Everaert, Bruggeman and De Creus, 2008),

Time-Driven Activity Based Costing
In this context, emerged the Time-Driven Activity Based
Costing (TDABC), that is a variation of the ABC system
but with a simpler and friendlier operation for execution
times of the activities necessary to produce the product or
provide the service (Dalci , Kosan & Tanis, 2009). A
TDABC system is presented in the form of time equations
which reflect the costs of different cost objects taking into
account the particularities of consumption that these are the
various activities that characterize the production processes
or business analysis.
There are several case studies on the implementation of the

model TDABC, where their advantages were observed,
namely that it is a model of easy construction, ease of
integration with management software and the ease of
obtaining information about the consumption of resources
by cost objects (Pernot, Roodhooft & Abbeele, 2007).
Through the TDABC is possible to study the effectiveness
of the processes at the level of available capacity versus
capacity utilization (Kaplan & Anderson, 2007). These
authors argue that the "time-equations" or cost equations
result in a simpler and less costly system than the
traditional ABC methodology.
Among other advantages, the model TDABC allows assess
the added value that determines the existence of each
activity, simulating the operationalization of resources and
test processes of rationalization of capacity used or defray
the cost of the unused time. But also limitations were noted
in some case studies in which, for example, have been
required there was the fact that a huge amount of data for
estimating the time equations (Varila, Seppanem &
Suomala, 2007).

The TDABC is supported on two parameters underlying,
the cost per unit time capacity and time required to
complete an activity (Kaplan, 2007). The TDABC is a
simpler system more affordable and economically much
more powerful system than the ABC. It simplifies the
process of costing and eliminates the surveys and
interviews of a typical system ABC (Kaplan, 2007).
The model TDABC assigns costs of resource directly to
cost objects (Kaplan, 2007). So, first the costs of all
resources (equipment, personnel, etc.) are calculated and
are divided by the capacity, giving the time when the work
is effectively executed. Secondly, the model distributes
costs of the resources using the rate of the cost of capacity,
estimative resource requirements for each cost object
(typically considered time as a measure of this capacity)
(Everaert et al., 2006).
It should be pointed out that the model only requires
estimation of time to process customer orders, not being

Table 1: ABC versus TDABC

Panel A: ABC
Step 1: Identify the
different
overhead
activities
Step 2: Assign the
overhead to the different
activities using a resource
driver
Step 3: Identify the
activity driver for each
activity

Step 4: Determine the
activity driver rate by
dividing the total activity
costs by the practical
volume of the activity
driver
Step 5: Multiply the

activity driver rate by the
activity
driver
consumption to trace costs
to orders, products or
customers

Panel B: TDABC
Step 1: Identify the various
resource
groups
(departments)
Step 2: Estimate the total
cost of each resource group
Step 3: Estimate the
practical capacity of each
resource
group
(e.g
available working hours,

excluding
vacation,
meeting and training hours)
Step 4: Calculate the unit
cost of each resource group
by dividing the total cost of
the resource group by the
practical capacity.
Step 5: Determine the time
estimation for each event,
based upon the time
equation for the activity
and the characteristics of
the event
Step 6: Multiply the unit
cost of each resource group
by the time estimate for the
event

In an ABC, rates of cost drivers are used to distribute the
costs of a department to each cost object, for example
based on the number of requests, number of complaints
from customers (Kaplan and Anderson, 2007).
Regarding TDABC, the phase of definition of resource
consumption by the activities is ignored, so there is not
necessary to allocate such costs. In this cost model there
are used time equations, which directly distribute resources
costs of the activities performed and processed transactions
to cost objects (Kaplan and Anderson, 2007).

METHODOLOGY
This study can be considered as a critical and descriptive
analysis with a qualitative and exploratory approach.
According to Cassel & Symon (1994), this approach is
especially relevant for cases in which the themes are
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emerging, in order to discuss matters with a great degree of
intensity.
Descriptive research is concerned to observe, register,
analyze, classify and interpret the facts without the
interference of the researcher (Andrade, 2002). The
qualitative approach, according to Denzin & Lincoln
(2006), “involves the study of the use and collection of a
variety of empirical materials that describe routine and
problematic moments and meanings in one's life”. In the
literature it can be conceptualized as a systematic study
that is based on materials published in books, magazines,
newspapers, electronic databases, i.e., materials that are
available to the general public (Vergara, 2005).
Based on the study of Srivastava (2007), the research is
driven by theoretical pre-considerations and follows a clear
process, as this allows conclusions to be drawn on the
reviewed literature. It may be classified as an archival
research method in the framework for conducting and
evaluating research suggested by Searcy and Mentzer
(2003). Our process of analysis comprised the following
steps:
• Definition of the unit of analysis: the unit of analysis has
been defined as a single research paper. We further
delimited the material in the research papers which should
be analysed considering the research scope;
• Classification context: We selected and defined the
classification context to be applied in the literature review
to structure and classify the material, checking and
comparing methodologies and research techniques, as well
as contributions to mitigate difficulties encountered in the
implementation of the model;
• Collecting publications and delimiting the field: our
literature review focused upon papers and journal articles
only. To establish a time span, a starting point was set at
2004. This seems justified, as the beginning of the debate
on TDABC can be traced to this period. Library databases
they were found were used where a keyword search using
some important keywords such as ‘TDABC, ‘Time-Driven
ABC’, ‘Time-Driven Activity Based Costing’.
Thus, within our defined objective, this work integrates
and takes forward the literature on Time-Driven ABC
since its conceptualization. According with the database,
they were found and analyzed 24 items in the topic.

Figure 1: Application of TDABC
The objective of the study was to verify, through
published articles, how the ABC model has contributed
to the development of TDABC model. A thorough
analysis of published articles was undertaken.
Table 2: Methodologies and Research Techniques
Type

Case Study

FINDINGS
Initially, an analysis of published articles was conducted to
ascertain what were the forms of research. The application
of the model was studied and also the existence of other
theories and models related with TDABC were verified,
according to Figure 1.

Authors
Oztaysi, Baysan and Dursun, (2007); Pernot,
Roodhooft, and Van den Abbeele, (2007);
Everaert, Bruggeman, De Creus, (2008);
Bank and McIlrath, (2009); Demeerec,
Stouthuysena and Roodhooft (2009); Manalo
and Valenzuela-Manalo (2010); Öker and
Adigüzel (2010); Ratnatunga and Waldmann
(2010); Stouthuysen et al, (2010); Hajiha and
Alishah (2011); Kont and Jantson (2011);
Lee and Enzmann (2012); Ratnatunga, Tse
and Balachandran (2012); Reddy, Venter and
Olivier (2012); Somapa, Cools and Dullaert
(2012).

Theoretical

Ayvaz and Pehlivanl (2011); Hedman et al,
(2013); Vogl, (2013)

Modelling

Zhang and Yi, (2008); Wu et al, (2011);
Sarokolaei, Bahreini and Bezenjani (2013);
Sarokolaei et al, (2013)

Questionnaires

Cardinaels and Labro, (2007); Hoozée and
Bruggeman (2010)

With respect to the methods and techniques of research, it
was realized that they were used Case Studies, Theoretical
approaches, Modelling and Questionnaires.

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For Oztaysi, Baysan and Dursun, (2007), one of the main
advantages of TDABC over ABC is that the calculations
are primarily based on measuring resource consumption
which facilitates the formation of a simulation integrated
cost justification methodology. According to the authors,
the methods complement each other and the contribution
reduces costs and have the potential to serve more
deliveries with the same resources.
Pernot, Roodhooft, and Van den Abbeele, (2007) did not
find significant difficulties when showing the ease and
speed in building an accurate model, the integration with
integrated management systems and the availability of
accurate information. ABC also appeared to cause two
significant problems. First, setting up an ABC system can
be very costly, especially if the current accounting system
does not support the collection of ABC information.
Second, the system needs to be regularly updated, which
further increases its cost. It was emphasized the benefits
brought by TDABC empirically analyzed in organizations.
The difficulties were hardly mentioned. It is believed that,
due to the small number of samples analyzed in the study
of these authors, it was not possible to conclude on the
difficulties encountered in implementing the methodology
TDABC.
However, despite the many advantages of TDABC pointed
out by the proponents of this costing method, some
criticisms have been made by some researchers. Cardinaels
and Labro (2008), for example, through a study of students
in a University, said that estimates of employees might not
be as accurate as Kaplan and Anderson (2004). In this case,
a significant degree of subjectivity is still found in
TDABC, the same as in conventional ABC. Sherratt
(2005), in turn, states that the TDABC is restricted to some
routine and pre-determined activities.
Bank and McIlrath (2009) reconducted a study in a
children's hospital, where the TDABC model was utilized
to estimate costs of provider resources and was applied to
three specific clinical scenarios common to any ED
service. In conclusion, ED process improvements that lead
to a modest decrease in patient waiting time, may achieve
larger, proportional decreases in the ED’s LWBS rate.
Although decreased waiting time in our setting was
achieved by “front-end” process improvement, “back-end”
strategies that reduce total ED census may have a greater
effect on reducing the LWBS rate due to the strong
association between LWBS and total ED census. It is still
possible to lower LWBS rates during periods of increasing
ED census and congestion.
The search of Everaert, Bruggeman and De Creus (2008)
was performed on a wholesale company. For them,
TDABC is extremely satisfying to cost models of complex
logistics operations, especially those that require numerous
tasks. For the authors, in each task, or even sub-task, it is
possible to identify a time driver. These tasks can be,
according to the method of study used, included in an
equation of time. Moreover, these authors explained that
the cost information generated by TDABC are more
accurate than those generated by conventional ABC. They
also stated that the new ABC approach provides better

analysis of customer profitability and efficiency of logistics
processes than other costing methods. Finally, integration
with ERPs was cited as another substantial advantage of
TDABC. They were not mentioned difficulties in the
implementation of the methodology in TDABC. However,
it is noted that the research requires a series of interviews
with company employees. In this case, it was observed that
these interviews consisted of an obstacle to be overtaken
by the executors of the new ABC approach. Furthermore,
the authors emphasized that the involvement of employees
in the application of TDABC seems to be fundamental.
Thus, one can say that employee engagement is another
problem identified in this research.
Demeere, Stouthuysen and Roodhooft (2009) stated that
the TDABC system seems to be well suited since it
incorporates next to the advantages of the traditional ABC
system some extra features like faster model adaptability, a
simpler set-up and a higher reflection of the complexity of
the real-world operations. The TDABC model in this paper
was set up for five different departments: Urology,
Gastroenterology, Plastic Surgery, Nose-Throat and Ears
and Dermatology. The TDABC system challenged
healthcare managers and department heads to identify and
analyze the underlying activities that drove the overhead
costs. Thus, the TDABC analysis allowed managerial
recommendations concerning improvement opportunities.
Furthermore, the TDABC approach introduced a healthy
competition and an open communication between the
different departments concerning possible operational
improvements. The introduction of interactive meetings on
business and operational matters promoted interhierarchical and more important inter-disciplinary
(between physicians and managers) communication.
Finally, while the interaction between cost-accounting
systems and strategy has been frequently viewed as a
passive one, in this study the TDABC information clearly
improved the department heads and healthcare managers’
understanding of the different organizational processes.
Hence, the clinic’s management was able to pursue
strategic changes that increased the value and effectiveness
of the current and future outpatient clinic.
Hoozée and Bruggeman (2010) show how collective
worker participation and leadership style influence the
emergence of operational improvements during the design
process of a time-driven activity-based costing (ABC)
system in a case study setting. In particular, in the case
company, the costing project was initiated at different
warehouses, which allowed to distinguish two types of
design processes. With the first type, the participation of all
organizational members, especially at the lowest levels,
fostered dialogue about the input parameters of the costing
model. In addition, when these discussions about costing
data were held in groups guided by a superior with a
considerate, people-oriented leadership style, operational
improvements appeared. With the second type, operational
employees were not involved in the design process; they
feared the new costing system, because it was used to
enforce compliance, and no operational improvements
emerged. Hence, the case findings suggest that, to appear
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The study of Stouthuysen et al. (2010) describes the
development and application of a TDABC system for a
small to medium sized academic library in a Belgian
University. The TDABC may improve the cost
management of several library processes, only focusing on
the acquisition process. More specifically, the acquisition
process concerns print formats (books, journals and grey
literature) and covers key traditional acquisition concepts
(ordering, receiving, paying, and using integrated library
systems and online vendor databases in an acquisition's
workflow). The implementation of the TDABC model
revealed much about the acquisition process. Using this
TDABC information, library management was able to
identify several factors that drive the cost of the acquisition
process of library items. The TDABC model indicated that
the acquisition of local books was far more expensive than
the acquisition of other items due to the use of specific
purchasing software. Secondly, TDABC information
revealed that pooling of activities could lead to substantial
time and cost savings. Finally, TDABC cost information
demonstrated that costs increase considerably if category a
personnel are involved in the acquisition process.
Hajiha and Alishah (2011) verified the implementation
feasibility of TDABC in hospitality industry and analyzed
profitability of various costumer groups by this system in
Iranian context. The results showed that using TDABC
model, in comparison with the existing traditional system
in Parsian Hotel, provides more proper data on cost and
profitability of customers. Also, the proposed model
distinguishes non-added value activities and demonstrates
real capacity of each parts of the hotel. can calculate
necessary time for activities by time equations in TDABC.
According to the results, it allowed managers to design an
optimized strategy to increase productivity and improve
processes. Consequently, time equations provide this
situation for a manager to update the equations without
doing repeating and time-consuming interviews. TDABC
enables the managers to know about the existing capacities
and exploit human resources more and better.
The study of Kont and Jantson (2011) provides an
overview of how university libraries research and adapt
new cost accounting models, such as “activity-based
costing” and “time-driven activity-based costing”, focusing
on the strengths and weaknesses of both methods to
determine which of these two is suitable for application in
university libraries. However, setting up an ABC system
can be very costly, and the system needs to be regularly
updated, which further increases its costs. The TDABC
system can not only be implemented more quickly (and
thus more cheaply), but also can be updated more easily
than the traditional ABC, which makes the TDABC the
more suitable method for university libraries. The TDABC
considers many aspects that affect employees’ efficiency
and performance, e.g., rest periods, personal time for
breaks, arrival and departure, and communication and
reading unrelated to actual work performance.
The paper of Wu, Wang, Yue and Sun (2011) sets up a
mathematical model to solve problems on the cost of cost
objects and analyzes errors occurred during the

operational improvements during the design process of a
time-driven ABC system, collective worker participation
and appropriate leadership styles are indispensable.
In the study Manalo and Valenzuela-Manalo (2010) ,
deals with a framework that combines the complementary
features of ABC and TDABC. The framework or Standard
Activity Measurement Plan is anchored in the computing
unit cost given the required minimum resources for a
particular activity. The activity unit cost is standard and
fixed for a certain period until such time significant
variables change significantly. The standard unit time per
activity is also used to establish the percentage of time
spent. In this manner, ABC data collection is minimized if
not eliminated totally. TDABC is not a replacement of the
traditional ABC. They should complement each other.
Their strengths should be combined to minimize their
weaknesses. Thus, the Standard Activity Measurement
Plan (StAMP) is developed to combine the complementary
features of both methods.
Öker and Adigüzel (2010), demonstrates the
implementation of TDABC in a manufacturing company,
showing how it can provide far more relevant information
about product profitability and capacity utilization than
standard costing. The benefit of TDABC is to enable
capacity utilization analysis. Through capacity utilization
analysis, the company can determine the excess capacity.
The management of the company can eliminate the excess
capacity, which means extra cost for the company. The
conclusion from the study is that the TDABC model is
more appropriate and easier for service companies to
implement than the manufacturing companies. This is
because the capacities are generally measured in terms of
labor times, and sometimes it is difficult for manufacturing
companies to measure capacity in terms of labor time.
Ratnatunga and Waldmann (2010) found that TDABC is
preferable to ABC in the TC modelling of ‘research only’
departments and institutes; both approaches do not provide
accurate information in ‘teaching and research’
departments. In these departments more accurate
estimations could be obtained from studying the workload
allocation methods and conducting direct interviews of the
staff undertaking research on ACG and other externally
funded grants. The TDABC model is a variant of the ABC
model which is specifically designed to simplify the
implementation and maintenance of activity-based cost
management systems (Kaplan & Anderson, 2004; Kaplan
& Anderson, 2007). The TDABC has an advantage over
ABC in the service organizations, however when obtaining
‘equivalent-time’ for the research activity of staff in
teaching departments will result in erroneous estimates of
research effort over a annual period, and thus the costs of
data collection would far outweigh the benefits (if any).
However, such estimations would be more relevant in
university departments and research institutes that are only
conducting research. Here, overall estimations based on
‘in-situ’ observations, face-to-face interviews and the study
of comparative information could be used for TDABC
modelling.

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implementation process of TDABC. By taking a case, it
demonstrates the applications of this model and the effects
on cost account by errors. The emphasis is laid on the
demonstration of data source in the model's applications.
After the construction of the TDABC model it was verified
that there are three types of errors, aggregation,
specification and measurement. There was then studying
the effects brought by these three types of errors in the
calculation of the cost model.
In TDABC model, it is generally presumed that the cost of
direct resources can be directly allocated to cost objects. It
is assumed that direct costs are measured without error for
every cost object, and hence excluded from the analysis; as
far as the share of the cost in indirect resources is
concerned. There are generally three kinds of errors:
aggregation error (AE), specification error (SE) and
measurement error (ME). Concluding that TDABC model
can give misleading information.
The authors Lee and Enzmann (2012) applied the model
TDABC in a radiology department in the U.S.. The study
found that, according to the current model, there was a
difference of values. With the application of TDABC was
really verified what are the costs related to each patient and
helped to manage the porting department. There was no
difficulty in deploying TDABC model, and there was no
comment on the traditional ABC.
For Ratnatunga, Tse and Balachandran (2011) the ABC
model, despite its theoretical superiority, has had only
moderate success in replacing the traditional volume-based
absorption costing models in complex organizations
worldwide. Even in organizations that have launched ABC
projects, the implementations often do not sustain. In
response to this general lack of enthusiasm worldwide for
ABC, accountants developed the TDABC model as an
alternative cost allocation model. A comparison between
the two models considers the TDABC easier to implement,
from an international perspective, and provides comparable
cost information for decision making. The research is a
case study to ascertain if any country‐specific factors
prevent the ABC implementation. To conclude: the
TDABC model has similar implementation complexities to
ABC if modelling conditions are strictly respected to; these
complexities are independent of country‐specific factors;
and in its simplest form, the model generates the same
decision information errors of traditional costing.
In the paper of Reddy, Venter and Olivier (2012) the ABC
is discussed since it is the basis from which TDABC was
derived. TDABC was developed to help to overcome the
problems with ABC which resulted in ABC having a low
rate of uptake. The advantages of TDABC are classified
into three areas: cost, ease of use and/or maintenance, and
accuracy. The cost TDABC is cheaper to implement due to
the fact that the TDABC process is simpler. In this regard
TDABC differs from traditional costing methods that do
not provide cost information at the activity and task level
cost. Similarly, the use management TDABC, you need to
consider issues such as the potential for resistance that may
be encountered as a result of increased cost transparency.

Somapa, Cools and Dullaert (2012) reports on the
development of a TDABC model in a smallsized road
transport and logistics company. Activity-based costing
leads to increased accuracy benefiting decision-making,
but the costs of implementation can be high. TDABC tries
to overcome some of the disadvantages of ABC and seems
particularly useful for the road transport and logistics
sector. However, the lack of quantitative data on cost
drivers remains a problem. TDABC has advantages over
traditional ABC which works well in the limited setting in
which it was initially applied, typically a single
department, plant or location, but becomes difficult when
rolling out on a large scale on an ongoing basis.
According to Sarokolaei, Bahreini and Bezenjani (2013),
Namazi (2009) introduced the third generation of ABC as
Performance Focused Activity Based Costing (PFABC).
This system, unlike TDABC that has a great emphasis on
time driver, allow select the appropriate cost drivers and
has more flexibility in allocating costs to activities. In fact,
PFABC first allocates costs to activities, then allocates
costs to products. However, this system like other costing
systems is face with the phenomenon of ambiguity and
uncertainty in estimating of standards as system input. To
solve this problem, in this article, it has been trying for the
first time using fuzzy logic to reduce of ambiguity and
uncertainty in PFABC in the estimation of standards.
Finally, the new system will be introduce as Fuzzy
Performance Focused Activity Based Costing (FPFABC).
Sarokolaei et al, (2013b) used fuzzy logic to compensate
the lack of absolute data in time driven activity based
counting system and design a new system entitled: fuzzy
time driven activity based costing, to minimize the error
coefficients of data by the new system. Time driven
activity based costing system is broadly relying on time
estimations and it is principally abstract. If the least error
occurs in estimating the key time activities, this system will
result in damaging effects which are sometimes broader
than the negative effects of not using this system. Thus, it
should try to use fuzzy logic in order to minimize errors in
time estimations and managers should make decisions with
higher assurance levels. Finally it can be stated that using
fuzzy time driven activity based costing not only will result
in losing the data in time driven activity based costing
system, but also it will present more complete and accurate
data for managers besides supplying the data.
The main objective in Vogl (2013) was to develop ways to
improve patient-level cost apportioning (PLCA) in the
English and German inpatient ‘DRG’ cost accounting
systems, to support regulators in improving costing
schemes, and to give clinicians and hospital management
sophisticated tools to measure and link their management.
The paper analyzes and evaluates the PLCA step in the
cost accounting schemes of both countries according to the
impact on the key aspects of DRG introduction:
transparency and efficiency. The goal is to generate a best
available PLCA standard with enhanced accuracy and
managerial relevance, the main requirements of cost
accounting.

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ICOPEV 2014, Guimarães, Portugal
Concluding, a best available PLCA standard in ‘DRG’ cost
accounting uses: (1) the cost-matrix from the German
system; (2) a third axis in this matrix, representing servicelines or clinical pathways; (3) a scoring system for key cost
drivers with the long-term objective of time-driven activity
based costing and (4) a point of delivery separation. Both
systems have elements that the other system can learn
from. By combining their strengths, regulators are
supported in enhancing PLCA systems, improving the
accuracy of national reimbursement and the managerial
relevance of inpatient cost accounting systems, in order to
reduce costs in health care.
One of the proposals of the article was to determine which
contributions regarding the ABC model in the new
methodology TDABC.

The analyzes were performed 16 studies that applied the
model and 08 studies that used combined with the
theories TDABC model. In studies where the model was
applied, it was able to identify the application process, as
well as the contributions and limitations. Among the
contributions, cost control, and a simple model can be
rapidly applied and a tool that provides data for managerial
decision making contributions that correspond to Kaplan
and Anderson (2004, 2007). Regarding the difficulties, the
main identified relates to the formulation of the equations
of time. It was observed that a large volume of data is
required for validation. Moreover, their applicability in
unstable environment in which the activities are not
routine, is apparently very limited.
Finally , there is the general characterization of how the
method is being researched costing TDABC. We notice
that this is a much studied under several different optical
and some little explored by researchers whose mission is
the development of studies that bring relevant news to the
method.
As a recommendation for future research, we suggest the
investigation of other means of publishing papers related to
the topic in discussion.

Table 3: Methodology ABC and TDABC
Type
Complements

Extends

Critical

No connection

Authors
Oztaysi, Baysan and Dursun, (2007);
Zhang and Yi, (2008); Manalo and
Valenzuela-Manalo (2010);
Pernot, Roodhooft, and Van den
Abbeele, (2007); Everaert, Bruggeman,
De Creus, (2008); Ratnatunga and
Waldmann (2010); Stouthuysen et al,
(2010); Kont and Jantson (2011);
Somapa, Cools and Dullaert (2012);
Sarokolaei, Bahreini and Bezenjani
(2013); Sarokolaei et al, (2013)
Cardinaels and Labro, (2007); Wu et al,
(2011);
Ratnatunga,
Tse
and
Balachandran (2012);
Bank and McIlrath, (2009); Demeerec,
Stouthuysena and Roodhooft (2009);
Hoozée and Bruggeman (2010); Öker
and Adigüzel (2010); ); Hajiha and
Alishah (2011); Ayvaz and Pehlivanl
(2011); Lee and Enzmann (2012);
Reddy, Venter and Olivier (2012);
Hedman et al, (2013); Vogl, (2013)

ACKNOWLEDGMENTS
The first author acknowledges CAPES - BEX 1066/13-7 for
the PhD grant. This work has also been supported by FCT in
the scope of the projects: PEst-OE/EME/UI0252/2014 and
PEst-OE/EEI/UI0319/2014.

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