Research On Theory And Application Of Activity-Based Costing

In recent 10 to 20 years, highly-automate and advanced enterprises were born on the basis of electronic technology revolution; it gave rise to huge revolution in management conception and management technology. There are great changes in the structure of product cost, that makes traditional "Cost-calculation on the basis of quantity" can't reflect the consumption of product cost well, and offer correct accounting information for decision and control in enterprises. Activity-Based Costing (ABC) is one cost calculation way on the basis of activity. It resolves the defect of tradition cost calculation ultimately and gives advanced basement to enterprise cost management at the same time. It's a tendency in the development of cost accounting science that traditional cost calculation on the basis of quantity changes to modern cost calculation on the basis of activity. So, there is great theoretical realistic significance to research and spread ABC in our country.E Kohler, one American accounting authority, brought out the thought of ABC at the end of 1930s. But until the middle of 1980s it was not noticed widely and researched deeply. After Robin Cooper and Robert Kaplan composed a series of cases, papers and books in the middle of 1980s accounting profession considered ABC widely. ABC tends to be accomplished after about 20 years development. ABC is understood widely in our country after some researchers introducing and researching. In the about 20 years development, ABC was used in many advanced foreign enterprises, and got great achievements. But the enterprises that used ABC and succeeded are very few in our country. This is because there are too many traditional enterprises in our country. The second is that we did less research in ABC realistic application. Now, there are a lot of problems in spreading ABC all round our country. But it is possible to apply ABC in some enterprises that condition is formed.In ABC, activity consumes resource and product consumes activity, so resource should be allocated to activity on resource driver and activity cost allocated to product on activity driver. The biggest difference between ABC and traditional costing is ABC collect cost on the basis of activity. The difficulty and key of ABC are division and confirm of activity, so researching of activity is the key of ABC application. Furthermore, cost driver, activity cost calculation procedure are problems that need to resolve in researching. The application of ABC can afford more accurate cost information, prepare for appropriate enterprise decision, but application ABC costs something, too. Deciding whether using ABC and in which level to apply it need to think about cost and effective that related, and analyze with cost-effective. After all, ABC is an open system. ABC will develop perpetually and be accomplished, so we must research and it continuously in theory and application.