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We developed and implemented a time-driven activity-based costing system in a case study in an Icelandic travel agency. Our seven-step TDABC system structures customers into groups and costs into resource pools. It links overhead costs to specific customers by measuring how much resource time all activities performed for them consume. As a result, it calculates customer profitability on the basis of direct and indirect costs. The results of this case study show how Icelandic travel agencies can analyze costs and compare the profitability of different customers and customer groups. Moreover, it can be shown that indirect costs need to be considered when analyzing customer profitability. The profitability calculated in the case study by TDABC is disproportional to customer profitability that is only based on markup on direct costs. The travel agency of the case and other Icelandic travel agencies can use CPA by TDABC for better profit management and process improvements.
CPA by time-driven ABC A case study in an Icelandic travel agency Eva-Charlotte Haensel CPA by time-driven ABC A case study in an Icelandic travel agency link italian free iBooks ipad
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