Determining the Cost Drivers Playing Effective Role in Product Costs by Using Ahp Method in Activity-Based Costing Method an Application

Under the conditions of increasing competition, the companies tend to gradually decrease their costs. In order to decrease the costs, it is very important to accurately determine these costs. The objective of the present study is to integrate the Activity Based Costing (ABC) and Analytical Hierarchy Process (AHP) methods in order to ensure accurate distribution of costs, which accumulate on the cost drivers, to the activities and products. In order to achieve this objective, the drivers to be employed in distributing the costs were determined using the Analytical Hierarchy Process (AHP) and 7 different specialists performed analyses in order to determine the distribution keys. As a result of this study, it was found that the unit costs, which the company calculates using the traditional cost accounting method, and the unit costs calculated using ABC-AHP method are different from each other. By using ABC-AHP method, differing from the unit costs that the company is currently using, it was determined that the activity processes and the activity costs that the companies used in calculating the costs at the product level are different. Among two types of model products that the company products, the unit cost was calculated to be 3% higher for the wider folder (GK), whereas it was calculated to be 12% lower for the narrower folder (DK). This might cause significant changes in the financial tables depending on the sales volume of the company. Moreover, in the present study, which activity caused a higher level of cost was also found. Thus, the managers would be able to determine which activity created a higher level of cost.

Keywords

Activity-Based Costing, Analytical Hierarchy Process, Unit Cost, Cost