The Research On The Application Of Standard Costing Management In OEM Enterprise

Since eighty years of last century, China began to carry out “reform and opening”policy, more and more world well-known company transferred their manufacture-chain toChina, As a result, OEM operation model developed quickly, This kind of operation modelsped up our step of international division of labor, promoted the development of ourforeign trading and economic, settled the employment problem of rich labor. Meanwhile,we also learned much advanced technology by this way，All this made great contributionfor China’s “reform and opening” policy.Nowadays, although we need to optimize and update some of our industryconstruction, OEM operation model, positioned in the lowest of value-chain, still will be asone of the important section of China economic development. OEM’s profit resourcemainly depended on low cost strategy, but, this cost advantage of cheap labor, low landcost and some preferential policy have already disappeared gradually. OEM enterprise’sdevelopment not only needs to create good product quality and goodwill, but also need tostrengthen cost management and control.Standard costing management theory, as one of the scientific cost management theory,firstly pre-set a cost standard as a benchmark, then compare with the actual cost to find thecost variance reason, thereby make analysis、assessment to evaluate working performance.Due to many advantages which traditional cost management method was short of, Standardcosting management have already widely applied in many developed countries such asmany Europe countries, USA and Japan since its birth, It has became one of the mostpowerful management tools to improve enterprise’s operation management and heightenenterprise’s economic benefits.This paper just based on the challenge and trouble OEM enterprise encountered andsome existing research data, considering the industry’s characteristics of OEM model, trying to input Standard costing management applying in OEM enterprise, meanwhile,exampled A company as a case study to prove the economic benefits and competition’simprovement when applying Standard costing management in OEM enterprise.