The Research On Activity-Based Costing System Building Of WY Company

China is known as " factory of the world", but with the development of economy and improvement of people’s living standard, human resources and raw material costs rise continuously, especially appearance of the "labor shortage" and "pay tide", China’s low-cost advantage gradually weakened, some foreign and even some domestic medium-sized enterprises transferred part of their orders to Southeast Asian countries like Bangladesh, Cambodia, the status of " factory of the world " of China is threatened. Chinese Garment processing enterprises are usually export-oriented processing, the quantity of orders is largely depend on the level of order’s quotes, and the quotes depends mainly on the level of production and operating costs.In the current economic environment, WY company as a small and medium garment processing enterprises in the southeast coast, in order to maintain their market competitiveness, they must change the traditional cost control and management model,strengthen cost management awareness.Firstly, I studied the theory of garment processing enterprises, as well as cost management theory, combined with WY garment processing enterprise cost management status and activity characteristics, analyze problems and causes of WY’s cost accounting, shows the necessity to the implementation of activity-based costing for WY company-Secondly., through case illustrates the application and implementation results of activity-based costing accounting system. Finally, proposed several safeguards for WY company to implement activity-based costing accounting system. This study has a important significance, it provides a reference for small and medium enterprises to implement activity-based costing. Meanwhile, among the few studies of activity-based costing of garment processing industry, this paper combine cost accounting and cost control,not only introduce the distribution principle of activity-based costing system, but also give further analysis of the value and importance of activities.