The Study Of Time-driven ABC Applied In AFS Company

Cost management is the permanent concern of enterprise businessoperation. Cost control not only exerts results of lowing cost and increasingprofits, but also promoting corporation’s managing level and core competitiveforce。Traditional costing allocates indirect production overhead by labor hoursor machine hours, which yields some unreasonableness in modernmanufacturing circumstances, since production overhead is taking over anincreasing proportion of production cost. Customer needs are more and moreindividuation and unique, and some products are in small production withrather complicated and higher-level of technologies. The production cost willbe extremely distorted if traditional costing methods are applied ever.Therefore a new and more effective costing method is being researchedtheoretically and practically. When ABC was brought into being, it was taken as an effective way tocalculate production cost. But the increasing expense and staff complaintstake ABC into fail finally. Then TDABC (time-driven ABC) was born at theright moment.This thesis starts with TDABC theory illustration and tells us TDABC isan advanced way of cost calculation through the representation of costrenovation in AFS, a manufacturing corporation. The example demonstratesTDABC can make up the defects of traditional costing methods and ABC.Through the successful application of TDABC in AFS, we can conclude thatTDABC can account costing and profits accurately, and management canemploy TDABC to measure work of efficiency and hold a positive effectiveon cost management and control.