A Budget Management System Based On Activity-Based Costing

Activity-Based Costing (ABC) has already been widespread approbated by the theories and practice as a scientific cost calculates method. Activity-Based Cost Management (ABM) also has been extensively accepted by business enterprise. It is necessary to bring the principle of Activity-Based costing into the field of budget for exert the effect of the ABM. Activity-Based Budgeting (ABB) can help manager understand and manage activity and business process, and establish equilibrium measure and target system for every activity and business process, and take the target and responsibility into the process's ratings system. Resulting analyzes and controls the budget carry out process and the result's evaluation.The article is based on analyzing the defaults of traditional budgeting, explains the advantages of Activity-Based Budgeting and discusses the main framework of Activity-Based Budgeting. In the final part this article discusses some general problems about the application of ABB and personal point of view about the ABB's application in China is given in this part.