A study on direct-ABC for specifying the factor of aggregating production cost

In multi model production, production cost is higher than that in mass production because of deterioration of production Lead Time and productivity. Therefore, it is more important to reduce production cost by improving operations and facilities to improve work-piece flow. We use cost analysis to know direction of improvement but exiting cost accounting method has two problems. First, it is difficult to specify the operation we need to improve because it accounts cost by each resource. Second, it cannot evaluate LT by cost. Also, Activity Based Costing method, which accounts cost by activity, has a problem that its target is only the activity which can reflect cost driver. So, we designed new cost construction to specify the operation, which is needed to improve, by cost. In addition, we developed a system which can get activity performance directly in order to get all activity cost data. Furthermore, we enabled to evaluate LT by cost by considering time value.