Activity-Based Costing Analysis for Train Station's Service

Abstract

Laem Chabang train station is subsidiary to container transportation office of The State Railway of Thailand. Its main objective is to provide services to container and oil trains of about 900 - 1000 container trains and 120 oil trains (inbound-outbound) each month. Its operation is divided into two main part: Laem Chabang station and Laem Chabang Port station operates 24 hours a day. This report does research on services of both stations. The services can be categorized into two types: container train service and oil train services which are different in their processes. This report analyze activity-based costing especially in the Laem Chabang train station's direct expense which is not include other organizations' expenses such as mechanical department, civil department or signaling department. Formerly, The State Railway of Thailand had not been calculating this kind of cost, the workgroup thus attempts to make activity-based costing of Laem Chabang train station to improve its service procedure and reduce its future cost. From calculation cost of service of Laem Chabang train station by applying activity-based costing, the cost of activity for each type of train is revealed. The cost of service for oil train is 1,575.85 baht per train, for container train entering zone B port is 809.61 bath per train and for container train entering zone C port is 811.76 bath per train. It is found that cost of service for oil train is the highest due to its lower client which is about one-eighth of container train; that is conforms to the law of demand and supply. In order to reduce cost, it can be considered to operate more oil trains or to decrease the number of labour related to oil train because most of the cost comes from labour salary (about 83%). Thus, optimization of labour can clearly lower overall cost.