Control Study, The Cost Of Doing Business Based On The Cost Of Integration Concept

The integrated cost conception is the integration of ABC and EVA and the basic principle is melting the captial cost of calculation of EVA into ABC. The cost control based on integrated cost conception is to apply the basic principles and methods of EVA and ABC into the practice of cost control during the process of enterprise's cost control to improve enterprise's ability of cost control.This article illustrates the integrated cost conception principle integrated by ABC and EVA.The integrated cost includes operating cost and capital cost in each link and remedys the constructing limitation,which the traditional Activity-Based Costing is unable to reflect the liability fund cost and equity fund cost,and embodys the production in more comprehensive and truthful.Then it brings out the framework of cost control design of the whole process of the design, purchasing, production and selling of enterprise's products based on intregrated cost conception and utilizes the control idea of intergrated cost conception to carry out flow design,and effect increment value evaluation and actual application for enterprise's cost control to help enterprises to nail down cost control standard and objective EVA for cost assessment and performance evaluation of enterprise. During the process of intergrated cost control,ABC and fund occuptation cost should be controlled to exert capital increment benefit.Through carrying on flow design and increment evaluation on Hengyang Steel Company, this article utilizes Du Pont decomposing principle to decompose objective EVA and objective cost to establish cost control standard and realize the objective EVA and help enterprises not only decrease cost but also increase EVA and renovate the management ideas of shareholders value maximization.