Recently, Robert Kaplan and Steven Anderson have outlined a revised version of activity based costing known as Time Driven Activity Based Costing (TDABC). This updated method is intended to overcome some of the shortcomings of ABC and the problems companies often faced with implementation.

Required:

1. Conduct online research of TDABC and briefly summarize this new approach.

2. Describe the following:

(a) The authors’ reasons for revising the original ABC process

(b) How TDABC is an improvement over traditional ABC

(c) The benefits expected by a company that implements TDABC 

3. In your opinion, will TDABC accomplish the authors’ goals? Explain.

4. Consider the relationship between ABC and activity based management. With that in mind, what limitations might a company implementing TDABC encounter as opposed to a traditional ABC system?