The relationship between activity-based costing (ABC) and time-driven activity-based costing (TDABC) has not been systematically investigated. We compare the two systems analytically and via a numerical experiment. Our most important finding is that TDABC is more accurate than ABC when traceability of resources to activities is high and activity traceability to products is low, while ABC is more accurate when activities are more traceable to products, irrespective of the level of resource traceability to activities.
Hoozée, S., Hansen, S.C., 2018. A comparison of activity-based costing and time-driven activity-based costing. Journal of Management Accounting Research, 30(1), 143-167.