Time-Based Activity-Based Costing Conventional Activity-Based Costing (CABC) was first introduced by Robert Kaplan and Robin Cooper in the late 1980s through a series of articles published in the Harvard Business Review. The method aimed to correct the shortcomings of standard cost systems; systems that attempted to cram all of a company's costs into three broad categories: labor, materials, and overhead (Kaplan, 2007, p. 15). Such a system lacked the resiliency and data management versatility needed to adapt to the changes in market demand that came with the 20th century. While companies have improved to meet market demands with services such as greater product variety, smaller order sizes, direct delivery, and specialized technical support, their traditional cost systems have failed to support efficient allocation of resources for the rising costs of providing all these services. CABC has attempted to resolve these issues. Cooper and Kaplan's ABC system improved efficiency by assigning costs to the product/order level, allowing managers to better recognize where money was wasted and where it needed to be invested. The basic model looked like this: Surveys -> Task Cost -> Item Cost -> Resource Allocation This was an interesting system that added long-term improvements; however it had a <50% adoption rate due to some pitfalls. The conventional ABC system worked well for limited environments, such as a small company or department, but became unnecessarily complicated for multiple facilities. This was due to the fact that: (1) it was necessary to regularly collect data from all employees which was time-consuming and tedious, (2) data collection, data storage, data processing and data reporting were expensive and (3) the system was n. ..... half the paper ... significantly different from the private sector (Kaplan, 2007, p. 198). TDABC allows a program to meet management's responsibility to guide expansions, manage budgets, and improve service while avoiding the difficulties posed by conventional accounting-based costing, which in this case largely involved surveying academics. TDABC features many improvements over the conventional ABC system created in the 1980s. Rather than simplifying your complex business for the purpose of fitting it into a conventional accounting-based cost system, the time-based accounting cost system allows your company to accept complexity and use it for accurate resource allocation and therefore, the reduction of costs and the improvement of the service. It is definitely a powerful tool for a variety of industries and I would love to be able to use it in a healthcare setting in the future.