Study On The Application Of Standard Costs In Coal Smelting Plant A

Recent years, in response to cope with the grim situation of the domestic policy as well as the fierce market competition, most coal enterprises in our country continue to strengthen the ability of cost management to gain a competitive advantage, by reducing the consumption of energy and resources. As a coal smelting enterprise, A is a coke-based private firm. It pays attention to increase its industrial upgrading and technological innovation since its establishment over20years. Because the limit of its technology and others, A didn’t pay more attention to decrease its cost, which lead to its high cost. While, with the change of entire situation, strengthening the control of the cost has become more and more important. This thesis is based on the study of the A plant’s producing process, the current situation and features of cost management, combined the theory of cost standard,to propose the combination of A plant’s costing with the Standard Costs. Through the theory of Standard Costs and the introduction of A enterprise, the paper intends to design a Standard Costs system applying to A plant. Then it can put forward views on the implementation related to A’s later improvement.This paper is divided into five parts, including six chapters. Various parts of the main contents are summarized as follows:The first part is about the introduction. Firstly the paper introduces the research background and research purposes, locking the methods of research and the structure, but also explores the expected contribution and the lack of the paper. The paper suggests that the coal smelting corporate introducing the standard costs system, can effectively deal with the external competition, also can solve the internal management of the enterprise. Therefore, how to develop the maximum effectiveness of the Standard Costs to the use of A coal smelting plant is the content and purpose of the paper. The second part is about theoretical analysis, including the connotation of the standard costs, reviews from domestic and foreign, the process of the standard costs and the analysis of the advantages of the standard costs.The Standard Costs system is initially produced in the United States, then it is widely used in many western countries. The system is on the basis of the standard operating procedures of the time quota management and the product development. The emergence of standard costs theory became the basis of the modern system of the cost accounting, and it played a big role in manufacturing enterprise of the world. The Standard Costs introduced to our country was relatively late, but since the beginning of the21st century, with the study of many scholars and the use of large enterprises, the Standard Costs has been a rapid development in our country.Harrison as the father of designing the standard costs system, which let the Standard Costs enter the implementation stage soon. The principle of the Standard Costs is a calculation method which is accordance with pre-established standard cost, then compares the actual cost with the standard cost, analyze the cost differences and process the differences. It includes three accounting processes. Among these steps, formulating the standard is prerequisite and key point; analysis of the differences can promote the realization of the purpose of cost control. By the introduction and the use of the standard cost can strengthen cost management, can improve the cost-conscious of employees and explicit cost management responsibility vested. The use of Standard Costs in manufacturing enterprises can play the full advantages.The third part is the basis of designing Standard Costs system for plant A, including the background information of A company, the judgment of A enterprise in applying the standard cost from the necessity and feasibility. To build a basis for A enterprise in implementing the standard cost system.A coal smelting plant in the domestic policy environment and market situation requires attention to cost management, reduces consumption of resources and saves costs. On this condition A enterprise can keep a comparative advantage in the fierce market competition. A coal smelters still uses the actual cost of the traditional method, but this approach to cost management tend to focus on the post-costing and can’t play effectively on cost management and the attribution of responsibility. From the angle of the feasibility and necessity for A coal smelter in use of standard costs, the views from their own conditions or the external level of maturity of the theoretical development, A company uses the standard costs system is feasible and is imminent to follow its development. So using the standard costs can help A to reduce costs, improve labor productivity and management.The forth part is about case study and recommendations. This part firstly introduces the A plant’s data, and creates a standard costs of direct materials, direct labor and manufacturing costs, then compares the actual cost of year of2011with the standard cost and respectively analyzes cost differences, finally processes the differences. According to the process of the case study, we can point out the problems in the process of production and management, then make relevant improvements and suggestions for A company.In fact, some inadequacies can also be found among the process of creating these standards. By specifically analyzing the differences, the weak point in cost management can be divided into specific aspects of the production, then provide advice and reference for A cost management.The fifth part is the thesis conclusion. The section summarizes the significance of this paper and conclusions, pointing out that the Standard Costs as an important part of modern cost management system, which put the scientific management methods into it. Compared to the traditional calculation of the actual cost, it plays a better role. Providing an effective means to improve A company’s economic efficiency and long-term sustainability.The main contribution of this paper has some aspects:first, it is the theoretical research, this paper systematically expounded the theory as well as the overview of domestic and foreign research, and a full discussion of the Standard cost accounting principles and implementation steps, which has laid a good foundation for the A coal smelting enterprises to implement the standard cost system. The second is the perspective of research. Although a lot of papers on the standard cost research, mostly research tend to be comprehensive description of the application of the standard cost system. While this paper introduces the case of A coal smelting enterprises, highlighting the calculation and the design of the standard cost system application process, and analyzing the advantages of standard cost from its own point. The deficiency of this paper is that there is no specific discussion for some detail production processes. Limited of capacity, time and some space reasons, this article just for A plant’s overall production process to apply the standard costs which can’t be more comprehensive and more systematic for some segments of the production operations with specific references.