Methodology for application of Maynard Operation Sequence Technique (MOST) for time-driven activity-based costing (TDABC)

Abstract

Purpose

The purpose of this paper is to present a procedure to implement time-driven activity-based costing (TDABC) using Maynard Operation Sequence Technique (MOST). In this paper three research questions are addressed: How can MOST be used to frame time equations? How can MOST be used for the improvement of productivity? How can TDABC cost information be used?

Design/methodology/approach

Case study research was performed at a manufacturing industry. Data have been collected for overhead distribution. The overhead cost was distributed on activity. Time equations are framed using MOST. Cost of activity is assigned to the product using time equations.

Findings

The proposed system simplifies the process of implementation of TDABC using MOST. This system not only determines the cost but also identifies the area where cost is consumed. It also identifies opportunity for productivity improvement.

Research limitations/implications

The case study was conducted in a manufacturing industry. The proposed methodology is suitable for manufacturing industry where standard work procedure is adapted.

Practical implications

The study explains the implementation of TDABC using MOST using a case study and results are meticulously discussed from a management point of view for appropriate decision making.

Originality/value

Besides the articles published so far dealing with the implementation of TDABC, no research was found on the implementation of TDABC using MOST.

Citation

Ganorkar, A.B., Lakhe, R.R. and Agrawal, K.N. (2019), "Methodology for application of Maynard Operation Sequence Technique (MOST) for time-driven activity-based costing (TDABC)", International Journal of Productivity and Performance Management, Vol. 68 No. 1, pp. 2-25. https://doi.org/10.1108/IJPPM-06-2017-0156