Research On The Integrating Of Activity-Based Costing

21 century is the transforming era from industry economy society to knowledge economy society with the rapid high-tech development. The information revolution based on computer, communication and network technologies has huge impact on human society as well as the modern management theories, methods and techniques. The corporate cost management is now facing an ultimate challenge.In 1980s', the Activity-Based Costing (ABC) established by Kaplan and Cooper was popular in American and European companies with obvious effects. However, with the change of economic environment and development of ABC theory and applications, many obvious limitations of ABC was revealed, such as high requirement of corporate information system, long application period, difficulty to obtain relative information, lack of subjectivity and foreseeing, and single ABC was challenged. How to overcome the limitations of ABC? How to consummate and exert the function of ABC? It is an important task for theoretic researchers.This paper starts with the limitation of ABC, constructs the integrating theory of ABC by"integrating"concept, studies the basic framework of ABC integrating, establishes the integrating system between ABC and strategic cost management, master budgets, cost planning and flexible margin costing, and finally form a modern cost management innovation mode based on ABC integrating. This study has an important theoretic significance as well as practical significance on ABC improvements.There are 7 chapters, and their main contents are as follows:Chapter 1 presents the practical and theoretical backgrounds of writing this dissertation. It firstly briefs the research purpose, the significance and current situation as well as the backgrounds of writing this dissertation. Then, the research guidelines, methods, structure and lain new ideas as well as the problems needing further study of the dissertation are introduced in a succinct way.Chapter 2 introduces theoretic basis of ABC and its integrating. First, this chapter discusses the theoretic basis of ABC, including definition, fundamentals, advantages and disadvantages, and the theoretic basis of ABC integrating, including the integrating theories between ABC and strategic cost management, flexible margin costing, cost planning and master budgets.Chapter 3 discusses the construction of ABC integrating framework. Through the unique conclusion on cost management methods in other countries, this chapter studies the ABC integrating framework, and form the basic framework consists of integrated strategic ABC, activity-based budgets, cost planning and flexible ABC.Chapter 4 discusses the integrating of ABC and strategic cost management. Based on the analysis of differences between ABC and strategic cost management, this chapter studies the integrating mode between ABC and strategic cost management, and explains the main content of strategic ABC in four aspects: product mix and pricing, customer relations, supplier selection and product design and development.Chapter 5 studies the integrating between ABC and master budgets. First, this chapter introduces the general theories of activity-based budgets, and focuses on the preparation, controlling and variance analysis on activity-based budgets. Secondly, this chapter studies the integrating mode between ABC and master budgets on three aspects: the portrait integrating of activity-based budgets and cost management system, activity-based budgets based on Balanced Scorecards, and the activity-based budgets based on related interest parties.Chapter 6 studies the integrating between ABC and cost planning. This chapter includes the origin and main content of Japanese cost planning, and the theoretic basis of integrating between ABC and cost planning. This chapter discusses the integrating mode between ABC and cost planning in five aspects: product target cost in full life circle, value engineering, centralized circle, headstream management, and product concept and management engineering technology.Chapter 7 studies the integrating between ABC and flexible margin costing. This chapter analyzes the variance between ABC and flexible margin costing, and discusses the integrating mode between ABC and flexible margin costing based on the advantages of flexible margin costing. This chapter emphasis on the theoretic basis, analyses its fundamental principles, and discusses the characteristics and practical significance of flexible ABC.The main innovations in this paper:1. Through the analysis on ABC theory limitations, this paper explores a research path to develop and consummate ABC theory, constructs the theoretic basis of ABC integrating, including the integrating theories between ABC and strategic cost management, flexible margin costing, cost planning and master budgets.2. By the analysis on the advantages and disadvantages of modern cost management methods, including ABC, strategic cost management, flexible margin costing, cost planning and master budgets, this paper constructs a basic framework of ABC integrating, and develops a innovation system for modern cost management based on ABC.3. Through the material research on ABC integrating, this paper designs many implementations methods for integrating systems, and provides a guide on how to expand the modern cost management functions.4. Through the integrating research, this paper establishes the basic theories on strategic ABC, activity-based budgets, activity-based cost planning and flexible ABC, and provides evidence for modern cost management practices.