Research Of Cost Management In ERP System

With the development of modern information technology and the Computer-Integrated Manufacturing System(CIMS) being applied in word-class manufacturing companies, traditional cost management model gradually cannot meet the needs of management. It is showed at two points. Fist, traditional cost accounting is not accurate. The second, traditional cost control is not effective. In traditional cost accounting, the increasing percent of overhead in cost elements make it sharply inaccurate to allocate overhead cost to products on the basis of direct labor hours. On the traditional cost control, it cannot go deep into the true factors increasing cost and control it purposefully. The Enterprise Resource Planning system(ERPs) integrating laggard traditional cost management model will not exert advantages of modern information technology. Cost information exported by this type of ERPs will even mislead decision-makers.In this paper, we will compare traditional cost management modeK Activity-Based Management(ABM) model and Target Costing model before we bring forward a new cost management one which is built on the basis of ABM and absorb the merits of Target Costing. The new cost management model pays more attention to target cost control in products design. This paper will discuss two core questions in cost management field, one is cost accounting, and the other is cost control. On the discussion of cost accounting, we will mainly expound Activity-Based costing(ABC). And on the discussion of cost control, we put forward two stages of cost control, the first is in products design, and the second is in the manufacturing process. In order to strengthen the control of overhead, this paper suggests that activity-based planning should be merged into ERP planning system.This paper offers a framework of the new cost management information system in ERPs, and discusses the system analyse and design of ABC subsystem.