Time-driven activity based costing – an improvement of standard activity based costing

In the article the author introduces time-driven activity based costing – a new method of costs counting. It is an improved concept of the activity based costing (ABC). The author performs a synthesis of scattered and incomplete knowledge based on the literature about the new concept. The author completes and systematizes all the information about the method, shows the advantages and limits and its possible practical applications This new approach to activity based costing enables easier, faster and less costs- consuming implementation and maintenance of the model and shows the easier way of making all the necessary modifications to adapt the model to the fast changing environment. The cost facts generated in a model are very close to the real ones. However the most important fact in the implementation of the concept of the time-driven activity based costing is the ability to gain the information about the level of the effectiveness of the operation – the difference between the resources owned and the resources needed. The method concentrates on the observation of the changes in the way of acting and actualizing the time standard for the unit of operation and makes it possible to identify the level of the accessible resources.