The Application Of ABC In The Express-delivery Company X

In the mid to late 20th century, the manufacturing industry advanced greatly because of the increasing usage of sophisticated automation& CS tech along with a significant rise of product diversity. This led to the decrease of direct labor hours in the total product cost but increase of factory overhead. More resources unrelated to products appeared in the total cost. The traditional cost method could report seriously distorted product costs in this new environment, because in the traditional cost accounting system, costs are allocated to product with conventional allocation bases measure only attributes of a unit, for example, the number of direct labor hours, machine hours or material costs consumed in making the product. A new approach of costing calculating was needed to overcome the weakness of the traditional one. Activity based costing is the answer.ABC systems focus on the activities performed to produce products in the manufacturing process. Costs are traced from activities to products based on each product's consumption of the activities performed. ABC acknowledges that products or services do not directly use up resources; they use up activities. ABC systems differ from traditional cost accounting systems in the nature of cost drivers used to trace costs. And another difference is that ABC systems focus more on providing information to enhance the management (ABM). Now ABC in China stays mainly in research field, the applications are still few.In this paper we used deduction analysis approach and theory with practice approach to implement research on ABC application in an express-delivery company X. First of all the theory and development status of ABC are expatiated. Then express-delivery company X is researched on its nature, products and current costing system. Then according to the defect of the current costing system the ABC system is designed and implemented in two viewpoints:a cost view and a process view. The ABC system is both an accurate cost accounting system (the cost view) and a performance evaluation tool (the process view). At last summaries and advices are given on this ABC system.In this paper a two-dimensional ABC system based on cost view& process view is set up in a Chinese native express company. This frame work is of great value to companies like X in China. With more time and material, a better system is expected to come forth in the later research period.