Study On The Application Of Activity-Based Cost In The Construction Enterprise

Since the beginning of the21st century, China’s construction enterprises havedeveloped rapidly. With the economic globalization and the deepening of reform andopening up, China’s construction industry is facing increasing challenges. IfConstruction enterprises want to avoid being eliminated in the new round ofcompetition in the market, they must adapt to the changing competitive marketenvironment and cultivate their core competitiveness, and the key to enhance their corecompetitiveness is to implement low-cost strategies. Therefore, strengthening the costmanagement of construction enterprises to reduce the cost of the project is a necessarymeasure for China’s construction enterprises, and also its inevitable way to improvecompetitiveness.Over the years, most of our construction enterprises still use the traditional costmeasurement model, but as a result of the tremendous changes with the continuouseconomic development and production environments, this approach becomesincreasingly unsuited to the needs of enterprises, and even hinders the furtherdevelopment of enterprises. The introduction of the theory of activity-based costing forthe cost of construction enterprises in China’s reform of the measurement modelprovides us a new approach. In this regard, scholars have undertaken extensive research.However, most research is mainly limited to theoretical introduction level, so we needdo more research to study how to apply this theory to enterprises (especiallyconstruction enterprises）.This article first introduces theoretical system of activity-based costing, and thenby analyzing status and problems of cost accounting of construction enterprises inChina, points out the necessity and feasibility of using activity-based costing. Byintroducing the applications practical case of activity-based costing in the constructionof enterprise, this article puts forward corresponding countermeasures and suggestionsfor improving economic efficiency and competitiveness and stresses the important roleand its significance, then finally arrives at the conclusion.