Time-Driven Activity-Based Costing (TDABC)

Time-Driven Activity-Based Costing (TDABC) is a costing method that assigns costs based on the amount of time resources spend on activities. Instead of using broad averages, it calculates how much time each activity takes to deliver a product or service and then assigns costs based on that time. This approach helps businesses understand the true cost of their operations, identify inefficiencies, and improve pricing strategies. By focusing on time, TDABC provides a clearer picture of where resources are used and where savings can be made, leading to better decision-making and resource allocation.