Application Of Standard Cost Based On Activities In Manufacturing Industries

With the use of high technology, business management is constantly advancing and improving. Continuously updated network systems for businesses manufacturing environment provides a range of new resources. New working environment has a certain impact on cost accounting for manufacturing enterprises, cost management accounting information provided by traditional methods fade away little by little. More and more people begin to question the accuracy of cost accounting. The mature of modern manufacturing techniques allow the cost structure of manufacturing enterprises undergone tremendous changes. More and more enterprises transition from labor-intensive production to capital and technology-intensive, which brings about the high percentage of indirect costs in the cost structure. Many companies have found the limitations of using the standard cost method for accounting.This article starts from the current cost management situation of China’s manufacturing enterprises, then leads to the shortcomings. Based on this, introduce the developing course, the main ideas and the core processes of standard costing and activity-based costing. After reviewing many researching results at both home and abroad, compare the theory and application of both methods and find that these two methods are not diametrically opposed, on the contrary they can be each other’s complement. So this article introduces the advantage of activity-based costing for the developing of the standard product cost. By combining the advantages of both methods and overcoming their shortcomings, I apply this new mind into Company C, to discuss the possible application in modern manufacturing enterprises.