The Research Of Products Life-cycle Cost Based On Activity-Based Management

With the quickly development of modern society and economy, especially wisely used of the new knowledge , the business style and management pattern which the enterprises face to have the large changes,also the cost management of enterprises face the new challenge with the changes. Enterprise cost management is not only pay close attention to the stage of products produce,but also extend to the stage of upstream and downstream. For example, market research, products design and development, products maintenance and disposal and so on. At the same time, enterprises must provide the true cost information at any stage. However,traditional costing accounting scope is too narrow,and the cost allocation standard is too narrow, so it's not fit for the demand of modern enterprise. Products life-cycle cost based on activity-based management overcome the disadvantages above, and solve the problems effectively.Products life-cycle cost accounting on the basis of activity-based management include the cost of R&D in product design, manufacturing ,marketing, after-sales service, end-of-life disposal and so on ,realized the large cost concept. So it's provides more complete cost information for operating decision of enterprise managers. Activity-based management thought is carried out in every stage of products production,and help to improve the cost information accuracy.On the base of recent research result domestic and overseas, this article combines the life-cycle cost and activity-based management, and proposed a new cost management system which modern enterprise needs. First, the article introduces the background and development process of life-cycle cost theory and activity-based management theory. The second, this paper analyses the advantages of products life-cycle cost based on activity-based management, and detail the process of building system. Finally, the paper analyses the practical application of new cost management in enterprise with the example.