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 n...

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Main Authors:	Mohd Yazid, Abu, K. R., Jamaludin, Muhammad Aizzat, Zakaria
Format:	Article
Language:	English
Published:	Universiti Malaysia Pahang 2017
Subjects:	TJ Mechanical engineering and machinery
Online Access:	http://umpir.ump.edu.my/id/eprint/19651/ http://umpir.ump.edu.my/id/eprint/19651/ http://umpir.ump.edu.my/id/eprint/19651/1/fkp-2017-yazid-Characterisation%20of%20activity%20based%20costing%20on%20remanufacturing%20crankshaft.pdf

id	ump-19651
recordtype	eprints
spelling	ump-196512018-02-27T07:48:29Z http://umpir.ump.edu.my/id/eprint/19651/ Characterisation of Activity Based Costing on Remanufacturing Crankshaft Mohd Yazid, Abu K. R., Jamaludin Muhammad Aizzat, Zakaria TJ Mechanical engineering and machinery 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://umpir.ump.edu.my/id/eprint/19651/1/fkp-2017-yazid-Characterisation%20of%20activity%20based%20costing%20on%20remanufacturing%20crankshaft.pdf Mohd Yazid, Abu and K. R., Jamaludin and Muhammad Aizzat, Zakaria (2017) Characterisation of Activity Based Costing on Remanufacturing Crankshaft. International Journal of Automotive and Mechanical Engineering (IJAME). ISSN 1985-9325(Print); 2180-1606 (Online) http://ijame.ump.edu.my/index.php?option=com_content&view=article&id=56&Itemid=110
repository_type	Digital Repository
institution_category	Local University
institution	Universiti Malaysia Pahang
building	UMP Institutional Repository
collection	Online Access
language	English
topic	TJ Mechanical engineering and machinery
spellingShingle	TJ Mechanical engineering and machinery Mohd Yazid, Abu K. R., Jamaludin Muhammad Aizzat, Zakaria 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	Mohd Yazid, Abu K. R., Jamaludin Muhammad Aizzat, Zakaria
author_facet	Mohd Yazid, Abu K. R., Jamaludin Muhammad Aizzat, Zakaria
author_sort	Mohd Yazid, Abu
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://umpir.ump.edu.my/id/eprint/19651/ http://umpir.ump.edu.my/id/eprint/19651/ http://umpir.ump.edu.my/id/eprint/19651/1/fkp-2017-yazid-Characterisation%20of%20activity%20based%20costing%20on%20remanufacturing%20crankshaft.pdf
first_indexed	2023-09-18T22:28:07Z
last_indexed	2023-09-18T22:28:07Z
_version_	1777416103630209024

Characterisation of Activity Based Costing on Remanufacturing Crankshaft

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