Time-driven Activity-based Costing Application Design Research In Enterprise D

Cost management has always been a very important aspect of enterprise production. Itssuccess determines whether enterprise can seize the initiative in the fierce market competition.Activity-based costing (ABC) owns a development history of nearly30years since it wasfirst proposed and applicated, and has been proven to be an advanced cost managementmethod. But so far in Chinese enterprises it has not been in wide application, indicating thatthere is another side of it not adapting to China’s national conditions. Time-drivenactivity-based costing (T-ABC) makes useful improvements on the former. Chinese scholarsanalyze its many advantages since its introduction and make positive attempts on the designand implementation in domestic enterprises. Under weak cost management and marketcompetitiveness, this paper using D chemical manufacturing enterprise as example, exploresT-ABC design and application within the enterprise.In order to by this way, Enterprise D canstrengthen internal saving work and solve the problems aroused by ineffective costmanagement to some extent.Firstly, through literature research this paper finds out there are still many gaps in thefield of applied research in Chinese enterprises of T-ABC. Then next part uses case analysismethod introducing enterprise D, making brief introduction of its cost accounting andmanagement present situation, analyzing its problems and the applicability of T-ABC aimedat these problems. At T-ABC preliminary design stage, this paper mainly illustrates T-ABCdesign principles, design procedures and each module design framework. For the case ofEnterprise D, the design should be based on cost-effectiveness, comprehensiveness, relevanceand reliability principles, and be gradually expanded in the order of preparatory work, moduleframework design, data access and analysis, pilot use and adjustment. At the same time, thearticle highlights activities and activity centers combing, cost information processingprocedure and costing inoformation processing standards design. At the stage of detailed design and application, previous studies only use T-ABC in acertain sector. The greatest innovation of this paper lies in using the specific productionprocesses and data of the whole chloromethane plant of Enterprise D as example, sorting outthe resource consumption involving in the production comprehensively. Then combined withstandard cost management ideas, this paper divides them into elastic resources, fixed assetsand human resources, clarifying the type of activities then establishing activity centersrespectively according to production process and job type, so to illustrate the complete designand application of T-ABC. Due to the complexity of the data acquisition and involvingproduction confidential, elastic resource and fixed asset activity operation centers highlightthe design ideas and procedures; human resource activity centers illustrate specifically thedesign and application of T-ABC combined with the actual production data of certain monthin enterprise D, and explain the advantages of T-ABC cost management through thecomparison of data information obtained by the new and old accounting method.Finally, summarizing application design and simulation implementation process inEnterprise D, this paper believes that T-ABC can support to various functional aspects of costmanagement. Although initially the design of basic model and access to specific supportingdata are complicated and time-consuming, once established, the subsequent use and updateswill be very convenient, and can bring great benefits to the enterprise cost management andstrategic decision. This paper hopes that with the development of information technology andrelated application theory, T-ABC will be able to break through the limitations of the currentapplication situation and play a greater role in wider areas.