Research On The Cost And Expense Budget Control Problem Of Z Railway Car Depot Workshop

Dated backed to20thcentury in the west, comprehensive budget management,which is a management tool that a corporation control the whole running processaccording to a presumed target, plays a key role in the development of moderncorporation. Since budget management was practiced in GE Cor., Du Pont Cor. andGM Cor. in1920s, it soon became popular in the western countries. With thedevelopment of Chinese reform and open policy, especially after Ministry of Financepublished “Some directions on corporations’ practicing budget management” in2004,Chinese countries become well known to budget management and start to try thismanagement tool. But, from the conditions of companies which have alreadypracticed, there are some flaws among which budget control is one of the urgent.As an important part of comprehensive budget management, financial budgetmanagement includes budget planning, execution, controlling and evaluating, butbudget control is the most important one. This paper reviews the theory of financialbudget management and further review the use and pattern of cost and expensebudget control with a theoretical framework of the whole paper. This paperintroduces Z railway’ cost and expense budget control as an example, sum up thatthere are five flaws: the cost and expense budget control is not based onactivity-based costing, the cost and expense budget control measures are notreasonable, the cost and expense budget control system doesn’t work soundly, thecost and expense budget control evaluation is not fair, the cost and expense budgetcontrol evaluation lacks timeliness. This paper give some suggestions: change fromtraditional costing to activity-based costing, revise the evaluation measures, improvethe control system, make the evaluation more fair, improve the timeliness of the costand expense budget control.