The Application Research Of Activity-based Costing In Huateng Printing&Packaging Company

In recent years, the packaging industry, especially the carton manufacture ofChina grows rapidly. Because of the low barriers to entry, the immense developingpotential, and the increasing competitors, the competition among packaging industrybecomes extremely intense. In addition, the growth of upstream raw material priceand labor cost requires the packaging companies to strengthen their cost management.However, the cost management in packaging industry is incomplete and has lagged farbehind the actual demands of companies. Consequently, the cost managementapproaches of packaging companies are outdated. With the industrial upgrade anddevelopment, many companies began to introduce more adaptive intelligentpackaging machinery, which increase the expenditure of maintenance anddepreciation. Due to the raise of indirect costs, the conventional cost accountingcannot satisfy the management requirement any more. Therefore, through analysingthe case Huateng Printing&Packing Company, this article intends to introduce theactivity-based costing method into Chinese packaging industry and provide ideas topackaging companies for the optimization of their cost management.Combining the production background of packaging industry, the organizationalstructure characteristics of Huateng, this article provides a plan of activity-basedcosting. To supply production operation approaches and products pricing strategies tocompanies, optimize the upstream and downstream value chain, the article comparescost information of activity-based cost accounting with the current cost. In the lastpart of this article, there are some problems about the promotion of activity-basedcosting mentioned. The author considers that the activity-based costing should not berestricted as a rigid cost calculation method. It should be regarded as a managementand thinking mode and be used for products design, products pricing, the customer’sprofitability capacity analysis, quality management and so on. This article not onlyaims to improve the case company’s management quality by using activity-basedcosting, but also to build a typical activity-based costing accounting system inpackaging industry and to improve the management quality of the entire industry.