UNDERGRADUATE THESIS SUBMITTED IN PARTIAL FULFILLMENT OF THE REQUIREMENTS OF BACHELOR DEGREE IN ACCOUNTING DEPARTMENT OF ACCOUNTANCY

  MEASURING CUSTOMER PROFITABILITY THROUGH TIME-DRIVEN ACTIVITY-BASED COSTING: A CASE STUDY AT HOTEL X JOGJAKARTA UNDERGRADUATE THESIS SUBMITTED IN PARTIAL FULFILLMENT OF THE REQUIREMENTS OF BACHELOR DEGREE IN ACCOUNTING DEPARTMENT OF ACCOUNTANCY SUBMITTED BY: GARRY BILLY ARDIANSYAH NIM: 041113107 FAKULTAS EKONOMI DAN BISNIS UNIVERSITAS AIRLANGGA SURABAYA 2016

  ACKNOWLEDGMENT Assalamu’alaikum, Wr., Wb.

  Alhamdulillah, all praises due to grace of Allah SWT with all of His greatness and generosity, Who bestowed guidance, blessings, strength, and ideas that author is finally able to finish this undergraduate thesis entitled “Measuring Customer Profitability Through Time-Driven Activity-Based Costing: A Case Study at Hotel X Jogjakarta as a partial fulfillment of the requirements to obtain bachelor degree of accounting in Department of Accountancy, Faculty of Economic and Business, Airlangga University.

  During the making of this undergraduate thesis, author had received a lot of help and support from so many people. Therefore, author would like to express sincere and infinite gratitude to: 1.

  Prof. Dr. Dian Agustia, S.E., M.Si., Ak., as Dean of Faculty of Economic and Business, Airlangga University.

  3. Prof. Dr. Bambang Tjahjadi, MBA, CPM, CMA, CA, Ak., as undergraduate thesis supervisor who has granted a lot of help, guidance, and motivation during the completion of this undergraduate thesis.

  4. Dra. Yustrida Bernawati, M.Si., CMA, CA, Ak., as guardian lecturer who has given a lot of mo tivation and advices during author’s college years.

  5. All lecturers and staffs of Department of Accountancy who have been patiently and willingly help author during the completion of this undergraduate thesis.

  6. My beloved parents, my brother, my aunt, and all my family members especially my grandma for the restless and sincere help, affection, strength, and prayers through ups and downs the author had been going through. Author hopes this undergraduate thesis can crease a smile on their faces.

  7. Directors and staffs of Hotel X Jogjakarta, Mrs. Mey, Mrs. Ilus, Mrs. Gita, Mr. Eko, Mr. Aan, Mr. Iwan and others who have huge contribution in the completion of this undergraduate thesis.

  8. My college acquaintances, Nitami Galih Pangesti, Hanifati, El, Duhita, Zach, Chika, Putri, Linka, Laksmi, Lila, Nisrina, Api, Dio, Tian, Ervan, Ario, Arif, Hanif, Anisah, Amalia, Irfan, Pras, Ria, Adele, Raisa and others author cannot mention one by one for the unstoppable support and dry jokes that author always has a big laugh with.

  9. All people that author may forget to mention who have directly and indirectly help the completion of this undergraduate thesis.

  This undergraduate thesis is far from perfection thus critiques and suggestions are widely anticipated to improve this research. Hopefully, this research will give advantages to the readers.

  Surabaya, 1 March 2016 Author

ABSTRACT

  Travelling intensity has been higher in the past few years making hospitality industry must be ready to provide the best service at optimum prices to customers who purchase and enjoy the services. Hotel as one of the accommodation service providers should be able to allocate resources accurately according to the actual needed capacity and thorough tariff policy for not losing the competition and obtain profit according to how much is projected. TDABC system is the most updated costing system which can assist the allocation of these resources. TDABC system is considered twice important to be applied in the service industry as service is intangible so costing system must show the exact and accurate number of resources used to provide the service. Through TDABC system, Customer Profitability Analysis is conducted with the aim of knowing the level of profitability every customer type possesses and classifying them as profitable or non-profitable customers. A case study had been conducted in a five- star hotel located in the Special Region of Jogjakarta resulting a profit recognized under TDABC system that traditional method used as the hotel's costing system failed to do so and more proper data on costs and profitability of customers.

  Keywords: time-driven activity-based costing, customer profitability analysis, hotel

TABLE OF CONTENT

  Title Page ................................................................................................................ i Approval Page ......................................................................................................... ii Declaration of Originality ...................................................................................... iii Acknowledgment................................................................................... ............... . iv Abstract ................................................................................................................. .vi Table of Content....................................................................................................vii List of Tables......................................................................................................... ..x List of Figures....................................................................................................... xii

  CHAPTER 1 INTRODUCTION ......................................................................... 1

  1.1 Research Background......................................................................................... 1

  1.2 Problem Statement ............................................................................................. 6

  1.3 Research Objectives ........................................................................................... 6

  1.4 Research Contribution ........................................................................................ 6

  1.5 Systematic of Research ...................................................................................... 7

  CHAPTER 2 LITERATURE REVIEW.. ............................................................ 9

  2.1 Theoretical Basis ............................................................................................. ...9

  2.1.1 Cost Accounting.. .................................................................................... 9 _{....................................................................................................}

  2.1.2 Cost...

  10

  2.1.2.1 Cost Object ................................................................................11

  2.1.2.2 Cost Classification .................................................................. 12 _{...........................................................}

  2.1.3 Activity-Based Costing System _{..................................................}

  16

  2.1.4 Time-Driven Activity-Based Costing

  19

  2.1.4.1 The Application of TDABC Models .......................................20

  2.1.5 Customer Profitability Analysis ...........................................................24

  2.2 Previous Research ..........................................................................................25

  2.3 Conceptual Framework ..................................................................................26

  CHAPTER 3 RESEARCH METHOD .............................................................27

  3.1 Research Approach ........................................................................................27

  3.2 Research Scope ..............................................................................................28

  3.3 Type and Source of Data ................................................................................28

  3.4 Data Collection Procedures ............................................................................29

  3.5 Data Analysis Technique ...............................................................................30

  BAB 4 RESULT AND DISCUSSION ..............................................................32

  4.1 Description of Research Object .....................................................................32

  4.1.1 Company’s Profile ...............................................................................32

  4.1.2 Vision, Mission, and Tagline of the Company ....................................33

  4.1.3 Organizational Structure ......................................................................34

  4.1.4 Customer Segmentation .......................................................................36

  4.2 Description of Result......................................................................................37

  4.3 Data Analysis .................................................................................................38

  4.3.1 Revenue Allocation to Customer Groups ............................................38

  4.3.2 Allocation of Costs to Customer Groups under Hotel’s Costing System .................................................................................................42

  4.3.3 The Application of TDABC System ....................................................43

  4.3.3.1 Cost of Capacity Supplied to Main Activities .........................45

  4.3.3.2 Unit Time of Activities ............................................................51

  4.3.3.3 Practical Capacity of Resources ..............................................57

  4.3.3.4 Capacity Cost Driver Rate of Main Activities.........................60

  4.3.3.5 Allocation of Costs of Main Activities to Customer Groups ..61

  4.3.4 Customer Profitability Analysis ...........................................................72

  4.4 Research Limitations ......................................................................................76

  CHAPTER 5 CONCLUSION AND SUGGESTION ......................................77

  5.1 Conclusion .....................................................................................................77

  5.2 Suggestion ......................................................................................................78

  LIST OF REFERENCES ..................................................................................80

LIST OF TABLES

Table 2.1 Time-Driven ABC Application ............................................................. 23Table 2.2 Previous Research ................................................................................. 25Table 4.1 Allocation of Room Revenues in 2014 ................................................. 38Table 4.2 Total In-House Guests in 2014 ............................................................. 39Table 4.3 Total Food and Beverages Revenues in 2014 ....................................... 40Table 4.4 Total F&B Customers Based on Customer Groups in 2014 ................. 40Table 4.5 Allocation of Food and Beverages Revenues in 2014 .......................... 41Table 4.6 Allocation of Total Revenue to Customer Groups in 2014 ................... 41

  Table 4.7

Total Cost of Customer Groups in 2014 under Hotel’s Costing

  System .................................................................................................. 43

Table 4.8 Details of General Activities in Hotel X Jogjakarta .............................. 44Table 4.9 Allocation of Room Costs to Main Activities ....................................... 45Table 4.10 Allocation of Food & Beverages Costs to Main Activities ................. 46Table 4.11 Allocation of Administrative and General Costs to Main Activities .. 47Table 4.12 Allocation of Repair & Maintenance Costs, Utilities Costs, Property

  Insurance Costs, and PBB Tax to Main Activities ............................. 48

Table 4.13 Allocation of Depreciation Costs and Amortization Costs to Main

  Activities ............................................................................................ 49

Table 4.14 Cost of Capacity Supplied to Main Activities .................................... 50Table 4.15 Practical Capacity of Employee .......................................................... 59Table 4.16 Practical Capacity Supplied to Main Activities .................................. 60Table 4.17 Capacity Cost Driver Rate of Main Activities .................................... 61Table 4.18 Allocation of Costs of Front Office Activities to Customer Groups under TDABC System ....................................................................... 62Table 4.19 Allocation of Costs of Food and Beverages Activities to Customer

  Groups under TDABC System ........................................................... 64

Table 4.20 Allocation of Costs of Housekeeping Activities to Customer Groups under TDABC System ....................................................................... 67Table 4.21 Allocation of Costs of Marketing Activities to Customer Groups under

  TDABC System.................................................................................. 69

Table 4.22 Total Cost of Customer Groups in 2014 under TDABC System ........ 70Table 4.23 Total Cost of Service Provision in 2014 under TDABC System .71Table 4.24 Customer

  Profitability Analysis in 2014 under Hotel’s Costing System and TDABC System ........................................................................... 73