The Research On The Integration Of Target Cost Management And Activity-based Cost Management

In recent 10 years, manufacturing enterprises are becoming highly automated by Electronic technology revolution, and enterprises' management concept and management technology have changed a lot, so do the structure of the product costs. So the traditional cost management concept becomes obsolete, it cannot provide accurate information for enterprise decision-making, and it also cannot correctly reflect the consumption of products. Intense competition has forced enterprises to seek for advanced cost management methods. Although Target cost management and Activity-based management are widely used, they cannot overcome the insufficiencies of themselves, so they cannot provide the best service to enterprises. They are also widely used in our country,but it has a low the use-efficiency. After the sub-loan crisis, the word economy is recovering, so our enterprises should seize the opportunity to become the world advanced enterprise, so we present the integrated model of Target cost management and Activity-based cost management. We want to use this model to cover the shortage and improve cost management efficiency, and it can help the enterprise to face the intensive competition.We firstly propose the theoretical basis of the integrated model of Target cost management and Activity-based cost management, and it is System management theory and Supply chain cost management. These two theory are the bases of the integrated model, and guide the model's implementing procedures. We analyse the necessity and feasibility of the integrated model, and have a conclusion that they have to integrated and they have feasibility in practices and theories. We use the concept of macro-enterprise to expand the scope of cost management, and make it contains not only production enterprise, but also the closely related enterprises in supply chain. In the integrated model, we decompose the target cost in multi-level. It helps the target cost to meet the activity and makes the cost responsibility clearly. This model also lay emphasis on cost analysis when confirming target cost and calculating the cost data, in order to supply cost information and strategies immediately. We also discuss the foresee problems that when the integrated model is applied in practical coat management, and the countermeasures.For the study,we mainly uses normative research, integrating use of comparative analysis, qualitative analysis and other research methods. Based on the literature review and basic theories and theoretical basis and necessity and feasibility, we present the integrated model of Target cost management and Activity-based cost management. In this paper, we use many diagrams, in order to illustrate and discuss this integrated model both in theory and practice.After constructing the integrated model and illustrating the processes, we hold that the theoretical basis are quite important, because it make the integrated model more clear and more theoretical, and it won't go wrong. We use the macro-enterprise concept to expand the scope of cost management, so it help decompose the target cost in multi-level and make the target cost to meet the activity. When optimizing the interior and exterior activity chain, the macro-enterprise's activity chain is also optimizing, and it can greatly improve the cost management efficiency. There are some defects:we just only talk over this model in theory, so that we lack of case study, and this can be a follow-up study direction.