The Research On Cost Control System Of Company C In Production Process

Taking over a dominant position in the global display industry, flat panel display(FPD) has completely substituted the traditional CRT and been in a period of rapiddevelopment. Due to the fierce competition in the market， the FPD manufacturingenterprises face huge cost pressures. Company C is engaged in the production of plasmadisplay. Its original conventional cost accounting based on quantities and working hourscan no longer reflect the product consumption accurately and provide correct supportfor the Company’s decision. Therefore， it is necessary to introduce an advanced costmanagement system. An advanced cost management system which is more suitable forCompany C’s own situation will help to improve and perfect the Company’s internalcontrol systems， contribute to the control of overall product cost，and help thecompany to keep strong market competitiveness.Firstly， this paper introduces two modern cost management methods, Target CostManagement and Activity-Based Cost Management and suggests to establish aTCM-ABCM cost management and control system by combination of both advantages.Secondly， the structure of the TCM-ABCM control system is presented in details,It is a cost system model based on Cooper’s two-stage activities and it takes six majorsteps to achieve full implementation.Finally， through deep and careful analysis of the cost control of Company C，problems existing in the old system are pointed out. Then the TCM-ABCM costmanagement and control system is brought into Company C for practice. Theeffectiveness of the TCM-ABCM cost control system is verified after inspection on theresults of implementation.Although there is a lot of research data on the cost control system in productionprocess. However, for FPD manufacturers, due to their special production processes, theresearch on the cost control system in production process of large flat display deviceswill be helpful to building an effective cost control system in production process， andbring references and guidance to FPD manufacturing industries.