Comparison of time-driven activity based costing and traditional costing systems: an application on accommodation establishments

Strategic cost management is a process stating managers' strategic decisions about the costs. In this process, strategic cost management techniques have been developed such as activity-based costing techniques on account of the fact that requirements for new and different cost management are not fulfilled with traditional cost management techniques (volume-based costing). The aim of this research is to compare traditional cost management techniques with time-driven activity based costing (ABC) techniques with regards to cost data of an accommodation establishment and to evaluate time-driven ABC techniques in terms of accommodation establishments. In accordance with this purpose, both traditional cost techniques also known as volume-based costing and time-driven ABC, one of the strategic cost techniques, were applied to X accommodation establishment operating in Datça and having a "holiday village concept" on the basis of division and department. A variety of cost information was obtained, interpreted and compared by applying both these techniques. In this research, a variety of different cost formulas were generated about how to apply time-driven ABC techniques to accommodation establishments and new and different cost information was presented to managers of accommodation establishment to use in strategic business applications. A new unit cost data (55, 292 TL) was obtained according to time driven ABC containing idle capacity cost while unit cost information measured per guest was 52,493 TL according to traditional costing technique in the research. In the research having a characteristics of qualitative research; "case study", often applied for implementing new theories, methods and techniques in the fields of cost and management accounting was used. Non-participant observation, interview and available data obtained from accounting records of the establishment were used as the data collection techniques in the research.