Time-driven activity based costing at Corelio printing

Abstract

Corelio Printing is the printing division of Corelio, a large Belgian multimedia news business. This division struggles with its costing system, a traditional method where overhead costs are allocated based on direct costs. This costing system may have been appropriate in the past, today however, it is not. The division suffers under-capacity, while the market situation is characterized by declining margins and increased service offered to the customers. Accurate cost control is hence crucial! In order to improve the costing system, Time-Driven Activity Based Costing (ABC) is presented as an alternative to the current system. By analyzing the case, students are familiarized with Time-Driven Activity Based Costing. They are encouraged to apply this new approach of ABC to a real business case in the printing business and to think about the pros and cons of this new method.