ABC Introduction And Traditional Costing Innovation

With the development of modern science and technology, and the aggravation of global competition, the level of capital intensity elevated steadily, the enormous changes have taken place in both production modes and cost structure: the proportion of direct labour cost reduced greatly, and the indirect cost increased obviously by a large margin, cost management of traditional costing is undergoing a unprecedentedly challenge. So how to break through the traditional costing, introduce a brand-new cost management idea, and make the cost information meet the financial report, inside cost-control & decision-making, become an urgent subject to be solved at present. Firstly, present the cost management means of research related to ABC and then introduce the paper subject through the summarization of discussion in both domestic and oversea research areas and brief introduction of company background in the case. Secondly, present basic concept of ABC, premise of its application, ABCM & implement process, meaningful value of ABC. Thirdly, discuss the necessary of transition between ABC and traditional costing at present, related areas and values. Finally, by dint of typical case, expatiate on the company in the case how to introduce cost management idea of ABC in line with its circumstances, accomplish the overturn of traditional costing, improve accounting information quality and support the target of cost management roundly through their intergration. Based on the case study, the paper provides both theory instruction and practice experience reference for Chinese enterprises to introduce ABC and build up ABCM. Not only make ABC fully understanding but also make it prevalent in management areas and enhance the level of its cost engineering. In the current condition of international economic globalization, the trend is inevitable that the method of cost calculation will transfer from calculation type to management type. Only those advanced enterprises which innovate unceasingly and practise incessantly can stand out from the cut-throat market competition and realize enterprise value in all-wave customer services.