Study On Production Costs Management Of VA Electronics Company

Scientific advances in information technology, the growing global market competition. With the rapid upgrading of equipment, the increasing manufacturing costs, and the gradual improvement of the national labor law, lead to production operating costs increasing both in manpower and resources continuously. Companies face the hundred years of the international financial crisis. With foreign financial institutions bankruptcy, rising unemployment, shrinking market demand; and domestic inflation, appreciation of the RMB, property rental and labor costs rising, break through the traditional methods of production costs management for survival and development is the urgent needs of the enterprise.This paper study the existing problems of the production costs management of VA Electronics Company, make analysis of the existing problems, base on activity-based costing, value engineering theory and KPI theory, base on the three major factors of direct materials, direct labor and manufacturing costs of main activity as the management objects, and base on activity analysis, the main activity improvement, activity-based costing and KPI combined to design a production costs program with economic benefit and life energy. The production costs program can be summarized as follows:First, reference the concept of product life cycle cost to define the scope of the production costs management of VA electronics company, setup direct materials, direct labor and manufacturing costs as the three major factors of the production costs. Secondly, to use activity-based costing, and with the ABC method, the process method and the fish bone diagram to study the three elements of the production costs and setting the main activity. Again, to setup improvement project and combined with the value engineering theory to improve main activity. Finally, through the establishment of project improvement team to arrange the improvement project, and then create a production costs programs finally from activity analysis to the main activity improvement and then to activity-based costing and KPI combined step by step, make overall management of the production cost effectively,and with the use of information, documents of the means of improving methods to make the standardization of production costs calculation and the project improvements, to make sure the cost management programs to be strengthened and promoted.Since the implementation of the production costs management program in VA electronics company, not only could give a clear cost management idea for VA electronic company, but also providing a standardized method to improve the management results. So, there are should have some reference in its research ideas and operational processes for the manufacturing enterprises of the production costs management.