• Korea Journal of Hospital Management
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• v.6 no.2
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• pp.37-69
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• 2001

A new cost management system, called Activity Based Costing (ABC) system, has arisen to solve the limitation of a Traditional Cost Accounting (TCA) system until last two decades and ABC has been applied by many companies. TCA systems have limitation in tracing cost because they arbitrarily allocate overhead cost to the cost objects without standard for direct cost distribution. ABC is an accounting system that assigns costs to products or services based on the resources they consume. The costs of all activities are traced to the products for which they are performed. Therefore ABC is a cost management system that provides a matrix to accurately quantify consumed resources triggered by activities and activities triggered by products and services. There is little implementation of ABC in the health services field, one of service industries, due to complicated and many activities, and volatile cost object. However, the necessity for applying reasonable cost accounting system is largely issuing as strategy responding hostile environment, and financial pressure, and it is imperative to implement the Activity Based Costing (ABC) system. Therefore, this study presents the framework to develop ABC system for total health service organizations. Cost objects in this study base on medical service activities per health insurance claim from one general hospital located in Metropolitan Statistical Areas (MSAs). Medical service activities include all health insurance claims in the hospital. The purpose of the study is presenting useful tools and basic frame to develop Activity Based Costing system for health service organizations which want to use ABC system. The steps to develop ABC system for health service organizations are following: 1. Identifying of activity centers; 2. Definition of cost objects and activity by activity center; 3. Analysis of activity and tracing activity contribution; 4. Allocation of direct cost for specific activity; 5. Allocation of indirect cost for specific activity; 6. Allocation of depreciation for facilities, applicants, and consumption goods; 7. Allocation of administration cost; 8. Allocation of cost among activity centers; and 9. Tracing cost of cost objects by activity center. This study identified necessary information from existing reports which hospitals generally made by each step, and defined outcome which had to be produced in each step using this information. The steps of this study had limitation to apply all different size hospitals because the steps were structured ABC system by one hospital, however, this study used similar basic framework and methods with general cases. When a health service organization want to apply Activity Based Costing (ABC) system on all activities of it in future days, this study is very useful to design system structure in the health service organization.

• Korea Journal of Hospital Management
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• v.10 no.1
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• pp.25-47
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• 2005

This study was purposed to find out the difference of the accounting of practical cost between the ABC system and the traditional costing system applied in a hospital, to verified general effect of ABC. Methods: This case study deals with the method of calculation, the cost information that is produced at K hospital in Busan. To examine ABC system and traditional costing system, applying them to the clinical pathology, radiology, physics in K hospital. Results: As a result of costing analysis, it is showed maximum difference of 50% between ABC and traditional cost. compared in revenue center, it occurs the difference of 15% of them. considering the result, it is confirmed that ABC could be used as a means to offer more precise information. therefore, ABC makes possible to produce precise costing information and grasp the driver of cost, and it is possible to reduce cost effectively. Conclusion: ABC provide six benefits: (1) more accurate of service delivered (2) inproved pricing and contracting strategies (3) improved management decision making capability (4) greater ease of determining relevant costs (5) reduced nonvalue added costs.

• Journal of Korean Society of Industrial and Systems Engineering
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• v.23 no.54
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• pp.55-64
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• 2000

Due to change in management environment and paradigms, companies need to the open management system that provides information for real-time costing, customer satisfaction, decision making support, responsibility management etc. We are not ready to implement this system yet. But we must introduce a new management system, i.e., ABMS(Activity- Based Management System) on the basis of the ARC(Activity-Based Costing) by development of production/information technique. This paper realizes foundational concepts of Activity and ABC, reestablishes the concept of ABC correctly and expands ABC for ABMS. Thus this paper is useful for ABMS modeling, leading competitors, total productivity improvement and strategic management for the best quality and service.

• Journal of Korean Society of Industrial and Systems Engineering
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• v.22 no.52
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• pp.355-363
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• 1999

As the indirect cost is increasing, ABC(Activity-Based Costing) Method that can distribute the indirect cost to each products is more effectively used. Especially for a Hospital to provide better medical service with patients, It's necessary that build ABC System to provide a regular cost information. This study proposed methodology enabling accurate cost analysis from importing concepts of ABC in a Hospital and presented a Cost Information Table for Work-Time Table and Output Services to calculate ABC.

• Land and Housing Review
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• v.13 no.2
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• pp.125-139
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• 2022

For construction companies to become competitive innovative, cost management as well as process improvement are required. Activity-based costing (ABC), which uses cost information to support long-term decision-making, is a tool that enhances a company's competitiveness. In this study, we compare and analyze tradition-based costing (TBC) and ABC to confirm the adequacy of performance-based costing. In addition, we will empirically examine the relationship between the impact of the reward system using ABC on employee satisfaction and involvement. In research results, the influence of the reward system on employee involvement appeared in the order of intrinsic reward (𝛽 = 0.338) and extrinsic reward (𝛽 = 0.308). In addition, the reward system showed positive (+) effects on employee satisfaction, with influence appearing in the order of intrinsic reward (𝛽 = 0.360) and extrinsic reward (𝛽 = 0.337). And employee satisfaction (𝛽 = 0.225) had a positive effect on involvement. We were able to confirm that it is necessary to build a reward system consisting of intrinsic and extrinsic rewards to increase employee satisfaction and involvement.

• Journal of the Korea Safety Management & Science
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• v.3 no.2
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• pp.145-154
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• 2001

This paper deals with Activity Analysis Method that is important procedure in Activity Based Costing System Implementation. There are many existing Activity Analysis Method, for example Interview, Questionnaire, Specialist Discussion and Work Measurement. Activity Analysis Data gained through this method has high reliability but this method bring about high cost. In case that certain company needs a strategic costing system, Activity Analysis Method which has high reliability will be need. But, if companies want the costing system as a internal decision making tool only, they need to design the ABC system fast and cheaply. This paper explains that Activity Analysis using existing finn material is good alternatives. So, this paper show the feasibility of Activity Analysis using existing firm material with comparing between job description, job specification information and Activity Analysis information.

• Journal of Korean Society of Industrial and Systems Engineering
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• v.28 no.2
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• pp.81-93
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• 2005

The main purpose of this paper Is to develop the Management Resource Analysis System for KOTRA which is based on Activity Based Costing(ABC). Because the products and services of KOTRA are exclusive and include a government subsidy, we need develop a different system from the private firm's ABC system. The Management Resource Analysis System that we propose is embodied using JAVA and JSP within an UNIX environment and developed as a Web-enabling base. It is expected for aiding a manager's decision-making such as resource inquiry, standard resource analysis, estimating the ratio of a government subsidy, case based reasoning, what-if analysis. The results of this paper suggest what points are to be considered when we apply ABC for Government Investment Corporation.

• Journal of the Korea Safety Management & Science
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• v.16 no.1
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• pp.239-250
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• 2014

The purpose of this research is to implement and develop the Economic Cost Driver Size(ECDS) extended model to determine the optimal cash driver size with measurement complexity cost and allocation fail cost. ECDS model can be used to seek both measurement accuracy and time efficiency of the Activity-Base Costing (ABC). The study also develops Activity Priority Number (APN) to evaluate the importance of nonvalue-added activities improvement and to determine the representative cost driver of value-added activities when applying ECDS model. APN consists of Severity Priority Number (SPN), Undetectablitiy Priority Number (UPN) and Occurrence Priority Number (OPN). APN can be obtained from lower-stream activity, current activity, upper-stream activity in terms of hierarchical dependency of SIPOC (Supplier, Input, Process, Output, and Customer). In order to seek both efficiency of invested capital and reduction of overhead cost, the paper proposes the integrated ABC and Economic Value Added (EVA) model using redesigned ABC-based statement of comprehensive income and EVA-based statement of financial position. For a better understanding of the proposed ABC-EVA integrated model, numerical examples are demonstrated in this paper. Cost drivers of ABC and capital drivers of EVA in the proposed model can be used to reduce activity overhead cost from ABC-based statement of comprehensive income and to lessen activity capital charge from EVA-based statement of financial position.

• Journal of Korean Society of Industrial and Systems Engineering
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• v.23 no.55
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• pp.51-71
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• 2000

A case of company manufacturing industrial valves is studied. To survive the fierce competition in the low-volume, high-complexity production environment, the company needs accurate information on the cost of its products. Current cost accounting system which allocates production costs based on the weights of intermediates and final products cannot provide accurate cost information that managers really need. Data on the company's cost structure and production processes were reviewed and managers were interviewed before problems with the current costing system were identified. Activity-based costing (ABC) system as well as an improved traditional costing system is considered to replace the current system. A prototype of ABC system is developed to better represent the relationships among the cost drivers, activities, and products.

• Health Policy and Management
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• v.8 no.2
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• pp.88-109
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• 1998

The main purpose of this study is to compare the traditional cost system and ABC(Activity Based Cost) system of clinical laboratory department in a hospital. The study subject was 296 services in clinical laboratory from March, 1997 to August, 1997. In a new costing system, cost for a lab test consist of direct cost element, activity based cost element, and allocated common cost element. In a traditional cost system, cost elements included direct cost element and indirect cost allocated based on test volumes The major findings of this research were as follows. 1. In the application of ABC system, total cost was analyzed as follows. Direct cost was 39.3% of total cost. Activity cost and allocation were 20.9% and 39.8%, respectively. The results of analysis to use traditional cost system were as follows. Direct cost was 39.3% and it was as same as the result of direct cost of ABC system. Indirect cost was 60.7%. 2. Activities of clinical laboratory of subject hospital were registration, pre-test operation, test, test result handling, delivery, culture, post-test operation, technical support, management support, and educational support. 3. The differences of the case of higher number of test case being carried out, the cost of ABC system was lower than the cost of traditional cost system. Otherwise in the case of lower number of test case being carried out, the rests have not been appropriately evaluated, and effective management were needed in clinical laboratory.