Study On Cost Formation And Control Of Coal Enterprise

Along with the establishment and consummation of socialism market economy system in China, the economic growth pattern has tended to intensive industry development gradually, as a microcosmic entity of economic operation, the enterprise has begun to aspire organic unity of economic benefits, social achievements and ecological results. Correspondingly it has become an urgent task to consider, study and analyze the seasonable structure of production material cost, social cost and environmental cost. On the basis of present situations and future development of the research on the costs of coal enterprises home and abroad, this paper systematically addressed the research result on cost formation and its control for coal producers.This article studied the technical and economic features and cost evolution law of coal enterprise. Based upon the special engineering process of coal production, it further studied the channel buildup and value-chain formation for coal enterprise, and also the conversion of roadway construction and capital pattern. A sealed valve chain was formed from coal reserve exploration to shaft and roadway construction, and then from coal mining and transportation to marketing, the channel build-up required several constructive multi-stage repeated operations and consumption of many intelligent and non-intelligent elements. it was pointed out that coal producer owned the features of output deceasing, resource distribution deconcentration and high risk in mining operation, these determined the cost evolution law for coal enterprise:the essence of economical operation for coal enterprise was the conversion of capital into reserve, and then the reserve was turned into output by the annual increment of capital, the cost of mining operation changed along with output periodically until the indication of output decreasing and cost rising, the cost structure of coal producer became more complicated with the progress of mining operation.This paper probed into the cost element structure and cost accounting principle. At present the cost formation elements for state-owned coal enterprise, confined by the regulations of "Business accounting and cost management methods for coal industry" stipulated by the former Ministry of Energy in 1991, was incomplete and the cost accounting method should be discussed. The cost elements of coal resource, environment protection, safety control and business transfer had to be introduced to remedy the incomplete in the present cost structure. With application of the principle and ideology of successful-efforts accounting and full-cost accounting, it was creatively pointed out that the expenditures of full and real cost for coal company should be booked by the accounting method of assets, capital and earnings respectively.This paper has established a model for cost structure element determination and simulation experiments were conducted. The theory and method for system dynamics were applied to construct the model for cost structure element determination for coal enterprise, the formation of coal in ground strata determined the spatial-temporal characters of coal cost and its significant suffer from geological conditions. The complexity of coal geology had certain connection with material and electricity cost, there were huge unlikeness between different mining locations for the consumption of electricity and material due to the diversity of seam geological conditions. Many factors played influence to safety cost, objectively of geological conditions such as mining depth, methane emission, ground strata property, water inflow, spontaneous combustion, explosiveness, harmful gases, fault and fold, mine service life and etc, and subjectively staff number, safety culture, safety training, staff injury insurance and etc. Visual inspection, operation inspection and historical inspection have been completed through construction of the model, we can see from the model that the costs of coal producer were affected by the costs for resource, operation, safety and environment, particularly speaking of seam conditions, mining process, mechanization level, reserve conditions, recovery rate, material price, loan interest, staff number and their structure and social development situation in the mining area, between all these factors complicated interrelationship existed, therefore the overall cost system for coal producer shown the features of complexity, nolinear, multi-loop and high class feedback.Cost control measures were proposed in accordance with cost structure element for coal enterprise and the model inspection theory described in the article, the exploration period should be shortened to control geological exploration cost; coal resource compensated utilization system should be upgraded for reasonable resource cost determination; mine risk inspection system should be perfected to lower coal safety cost; the construction of cost element management organization and system should be improved, the workflow of cost element management should be reorganized consecutively to establish an effective system for cost element management performance and assessment, modern measures for cost accounting and control should be applied comprehensively to achieve the strategic target of cost element management.