The Research Of The Activity-based Costing Application Under Value Chain Model

In recent years,with the international development of market economy in China,and constant changes of the domestic economic environment,Chinese manufacturers are going through unprecedented competitions and challenges.With huge system and numerous staff,many manufacturers,especially the state-owned manufacturing enterprises are facing serious problems.With heavy historical burdens and high operating costs,the viabilities and living spaces for such companies are decreasing day by day.In most companies,cost accounting is performed on a basis of each profit center,and then be summarized by the accounting department.The final result will be used to guide the activities of the companies.In this paper,based on the Activity-Based Costing under value chain model,the author proposed some suggestions regarding the improvement of the cost accounting process of a large state-owned tire company after analyzing its current financial situations and cost control and accounting processes.On this basis,the author also analyzed the cost drivers of every resources and products in order to further guide the company's decision-making in cost control and accounting.The key factors of the Activity-Based Costing under value chain model are resources and cost drivers,which has general application that are universal in every walk of life.Based on the analysis of resources and cost drivers in different industries,we could find the key cost control points and build value chain cost management model based on the whole value chain,which is helpful for the companies to control cost from each key point of the whole value chain from a strategic view and thus effectively reduce the real cost,increase company profits and remain invincible in today's fierce market competition.