Application of an ABC Costing Model to an MSME Company in the Manufacturing Sector into the UDA ERP Administrative System

Abstract

In Cuenca, Ecuador, MSMEs apparel manufacturing companies and those that emerge as social responsibility projects, have notable advantages over their regional competitors. However, the processes they use to determine production costs are still inefficient due to multiple factors, such as lack of knowledge in costing methods or lack of computer systems that expedite data analysis. This research paper summarizes the results obtained after the application of the ABC costing model, which allowed it to be incorporated into the UDA ERP software, developed by the Universidad del Azuay. As a result of the work, the information entered in the three modules involved in the process (inventory, production and costs), generated the costs of the raw material, labor and CIF for each product, including activities, inductors of cost and resources, concluding that the choice of an appropriate cost model generates objectivity and precision in the related process.