Research Of Activity-based Costing Application In Home Appliance Manufacturing

The traditional costing is no longer applicable for today’s home appliance manufacturers(HAMs) due to the increasing of indirect expenses under the modernization environment. Building a new costing management system for controlling costing and improving profits is becoming a critical factor for HAMs to survive in the competitive market. However, the information technology application in the manufacturing process has not been considered in the Activity—Based Costing(ABC) accounting to update the traditional accounting decision-making systems by most HAMs.This thesis first reviews the history and theory of ABC. The author introduces the application of ABC on HAMs in our country, which is significant practical for them due to various changes in times. Then ZX Appliance Manufacturing LTD was taken as a use case.First of all, the costing control issues in the company are presented. The necessity and feasibility of implementation of ABC to the company are analyzed. It is concluded a good fit. Next, in order to implement the ABC, an innovation system and model of ABC accounting are designed. Based on the model, the implementation process in the company is detailed. The benefits of ABC implementation are compared with the traditional costing accounting, considering the standard costing of manufacturing expenses, gross margin of products etc. Finally, based on the successful application of ABC in the company,suggestions are given to implementing ABC management across all HAM business. This is a case for all HAM to improve their accounting management systems, and hopefully it is a solution for controlling costing.