Research Of Operating Leverage In View Of Activity-Based Costing

Has been operating leverage for the research and application, theory and practice are based on traditional cost behavior that consider fixed component which does not change with the volume is the fulcrum, the only volume is force. However, the division of costs in activity-based costing is different from traditional. In addition to production volume, whether activities also affect EBIT. How to denote operating leverage degree in activity-based costing? Combined with the essential meaning of operating leverage, this article attempts to explore these issues.First, this paper adopts normative research to outline related theory and the existing problems of the existing research and give the article's research theme. Then, we abstract practical problems to mathematical functions using mathematical method, establish the activity-based operating leverage degree model through multivariate function complete differential method, and then explain the meaning to management decisions, and analyze the specific relationship with traditional operation lever degree model. Finally, we interpret the related conclusions through numerical example.The main conclusions of this paper are that, due to the business volume is multi-dimensional index vectors that include production volume and activities volume in activity-based costing. Then, Activity-based operating leverage degree model is not"simple"expansion for the denominator of traditional operating leverage degree model, but abstract the relation between portfolio and EBIT in activity-based costing as multiple functions. According to the essential meaning of operating leverage, with multiple functions differentiation, author define activity-based operating leverage and deduce activity-based operating leverage degree is a multi-dimensional vector-valued. The amount of work decide the size dimension, the rate of EBIT variance ratio to portfolio variance ratio is corresponding component value, the plus or minus sign of component value explain the direction of the rate of change in portfolio and EBIT. In addition, activity-based operating leverage degree model is multidimensional expansion for traditional operating leverage degree model. Due to companies there must be batch activity and product activity, when non-unit activities are equal to the minimum amount of activity respectively, traditional operating leverage degree model is a special case of activity-based operating leverage degree model.Finally, activity-based operating leverage model provide a multi-perspective way for the business managers to control the non-system operating risk.