Research On ICC Model Based On Time-driven Activity-based Costing

With development of globalization and demand leading market of contemporary economic, enterprises are facing increasingly fierce competition. That how enterprises can win in the tough competition is a topic which deserves forever exploring of management theory and practice.Costs are a source of value creation, but also the driving force of profits. Scarcity of resources and unlimited human needs determine that the cost of management play a more and more important role in the increasingly fierce competition. Resources create value by the form of cost and cost management is carried to maximize and efficiently use resources of organization. Cost calculation which is an important basis for decision-making is the cornerstone of cost management. In order to achieve objective of maximize shareholder value, the enterprise pay more and more attention to the cost of capital and product cost accounting methods have moved ahead, too.With its unique cost concept of "activities consume resources and products consume activities", Activity-based Costing greatly improve the usefulness of cost information in decision-making. However, due to the congenital defects in ABC, it difficult to cope with the complex conditions and the costs calculated are "incomplete" and difficult to support long-term decision-making. These make against maintaining long-term competitive advantage and value creation. Therefore, it is an important issue to gain "complete-cost", which is also the starting point of this paper. Time-driven Activity-based Costing can reflect more complex actual situations. Its accuracy is been greatly improved, easier to implement and it also simplified the company's financial cost accounting. Through integration with EVA, we can get the "complete-cost" and the real value of enterprises is reflected.In this paper, Economics and Financial Management and so on are the theoretical basis, Time-driven Activity-based Costing and EVA are as the basic method, ICC model based on Time-driven Activity-based Costing has been systematically researched. It is stated the research motivation of this paper through in-depth analysis of the research background. The management advantages of Time-driven Activity-based Costing are analyzed through comparing with a variety of costing methods. Furthermore, the concept system, cost classification, framework, application conditions and assumptions of this model are studied and the model is constructed as well. The application development of this model is also discussed. Finally, the practical significance of this model is verified by analysis of its application in case enterprise.