Research On The Introduction And Implementation Of Activity-Based Costing In MK Company

Along with social progress and development,the level of science and technology in our country is constantly upgrading.High technology has been widely used in production.Besides large pillar enterprises,small and medium-sized enterprises have become the backbone of economic development and social progress.Promotion of such enterprises and how to make them play better roles in national economy have become important goals of economic development.Especially for small and medium technology-based enterprises,they are receiving more support from the government.They keep adjusting strategic decisions to meet the requirement of market development and participate in the market competition.Cost information has a substantial influence on strategic decisions and management control of the company.Cost accounting is a necessary means to get information.Compared with accounting requirements of modern enterprises,the traditional cost accounting method is too old and incomplete.Enterprises need a better cost accounting method in compliance with the needs of development.Other than the old model of the traditional cost accounting method,Activity Based Costing is a method which could allocate expense more accurate for operation,business process,production,service and customers and provide more actual and reliable cost information for business management and decision.This paper has taken a small and medium-sized high-tech medical equipment manufacturing company,MK Company,as an example,studied the business processes of the company and the existing cost accounting method According to the basic situation of the company and the status of cost accounting,this paper has analyzed the feasibility and necessity of Activity Based Costing to build up the foundation in order to introduce Activity Based Costing.Corresponding means in accordance with the company's working procedures have been employed to analyze each working activity and key operations have been divided based on the company's management requirements and requirements for cost information.Cost centers have been established accordingly to locate cost driver of central work so as to allocate resource cost to each working center,which enables enterprises to obtain true and more precise cost information and helps with connections of activity chain.It also helps to cut down non-value-added activities,decrease cost and enhance enterprises'value so the enterprises can achieve more competitive advantages,survive and develop smoothly in the field of medical devices with intense competitions.