Activity-Based Costing System For Medical Equipment Manufactures

Abstract

          Presently, global competition in technology field changes affect and actually change the business practices in every industry including manufacturing. Shorter product life cycles requiring timeliness and speed, fragmented markets requiring customized features and flexibility, demand uncertainties, increased new product introductions and expected and tight competitions based on price and quality have put manufactures under extreme pressure. In order to address all or at least most of these imperatives, a manufacturer is recommended to apply a so-called Activity Based Costing (ABC) method. Instead of traditional costing method, ABC method is capable of tracing overhead or indirect cost in the calculation of the total production cost. This failure of traditional costing method has cause the distortion of product cost. The main objective of this study is to develop a web-based ABC system by using for manufacturing companies specifically Selia-Tek companies at Sungai Buloh, Selangor that supply in medical product (syringe). This ABC system simplifies to identify companies either that has already applied the ABC method manually or intends to identify the types of activities and costs involved in these activities. Thus, this ABC prototype is hoped to improve further the process planning and action of manufacturing companies via cost savings and improved revenue.

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