| With rapid development of electronic information technology since1980s, the market environment which enterprises have to face took place a huge change. It leads to innovation in enterprise management, and Activity-Based Costing Management (ABCM) emerged on the conditions. With the rapid development of high-tech, the automation of production has been improved. It greatly changed the product cost structure, as well as product diversification and increased customer features. Direct materials and direct labor which can be distributed directly to the related product costs fall in the share of cost while the proportion of manufacturing costs have increased substantially, which makes the traditional method of cost allocation of a single manufacturing cost of the number of standard methods were not suited. Traditional costing methods couldn’t adapt modern management requirements. And the reform must be enforced. Today cost has become the vital resources which cope with market competition and maintain enterprise customer relationship. To realize business strategies, enhance enterprise competitiveness, the cost must be carefully studied, enterprises should analyze cost behavior, control their changing patterns. In traditional cost management system, the cost of business is different according to the purpose and it is distributed in different apartment. The enterprise can’t understand it in detail. Since there is no complete cost information, enterprises are difficult to find the problem from the cost management and to conduct the rationalization and improvement of economic efficiency. With the backward of traditional cost management methods and the problems rises gradually, it needs to find new ways to change the cost management and status quo behind urgently.The method of indirect expense distribution which ABC adopts starts up with cost drive, calculate the work, and distribute the manufacturing expense according to the work consumed by products. Such distribution method provides enterprise more precise products information. ABC has been proved precise, objective and valid. But in our country, the ABC is not widely applied. The Theory of Activity-Based Costing is a theory of cost management adapted to modern enterprises; it provides far-reaching sense to research its system and application for improving the level of Chinese management.Firstly, this paper indicates the condition which ABCM emerges is the failure of the traditional costing approach in providing the enterprises with accurate cost information and the advantages of the Activity-based Costing is obtained on this basis. Then this paper analyses the current cost status of the war manufacturing enterprises and obtain the necessity of the application of Activity-based Costing. Then, the author sets a general procedure design steps for war manufacturing enterprises on the basis of his study. At last, combining with the implementation practice of the cost management in XK Co. Ltd., through the analysis on cost status of the company, the author finds out the problems existing in the cost accounting system the company currently uses and specially design an Activity-based Costing system for the company based on its current practice, further demonstrates the feasibility of the Activity-based Costing for manufacturing enterprises and provides some suggestions for the application of the Activity-based Costing in manufacturing enterprises.There are some defects in this article. For example, The case of enterprises have not yet fully applying the activity-based costing method, the problem can only stay in the theories level, therefore, we couldn’t find the problems when this method put into practice. These shortcomings will become the focus of research in the future... |
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