Application Research On Activity-based Costing In Construction Enterprises

The further implementation of the new urbanization strategy of the sustainable healthy development will give our country’s construction enterprises a better development opportunity. However, with the development of modern science and technology, construction enterprises will be more and more mechanized, and the competition between construction enterprises will be increasingly fierce. Most construction enterprises, however, are still using the traditional cost accounting method, which cannot meet the needs of project cost control. Besides, the introduction of the project bidding and tendering system and the improvement of environmental awareness etc will increase the indirect cost of the project, making the traditional cost accounting method weak in providing accurate cost information. In order to survive in a competitive market, it is necessary for construction enterprises to apply a more effective cost accounting method, which is the activity-based cost method. Activity-based cost method can help the construction enterprises to reduce or even eliminate abnormal losses and unnecessary waste, which would reduce the project construction cost, it will also play a supervision and guidance role in making continuous profit and success, reflect the progress and the overall management of construction enterprises more directly, and thus promote the steady development of the construction enterprises.This paper first describes the present situation and background of activity-based cost method in domestic and foreign construction enterprises. Then, it briefly introduces the relevant theory of activity-based cost method and cost structure of construction enterprise, and the content of the bill of quantities of HJ Company. Then it explores the necessity and feasibility of application of activity-based cost method in HJ Company, introduces project construction procedures and operation process of the placement of the housing construction project, decomposition the structure, determines the activity center and explores the cause for indirect cost allocation. Then, taking housing project of HJ company as example, the paper compares activity-based and traditional cost accounting methods, analysis the difference, and explores the problems and difficulties in the application through real-time monitoring and feedback. Finally, on the basis of above steps and full argument, the paper puts forward some targeted suggestions for improvement, provides guidance for HJ company to apply activity-based cost method comprehensively in the future, and reminds related personnel of HJ company of the procedures and details that should be paid attention to. Anyhow, it’s an attempt and exploration for HJ Company to apply activity-based cost method in part of the project, and it will provide lessons for construction enterprise to apply the method.