Research On Application Of Activity Based Costing In Condiment Industry

With the rapid development of the catering industry and the transformation of the concept of household consumption,condiment industry in China has entered a rapid growth period.The market is so fierce that the enterprise must constantly improve the diversity of products,which brings great difficulties to the management of enterprises,and cost management has become a key factor in the survival and sustainable development of enterprises.Most of the condiment industry,like other manufacturing enterprises,use the traditional cost accounting method.They share the cost of manufacturing according to the yield of the product or product manufacturing time,which results in the company being unable to obtain the correct cost information and making the wrong decision in the cost control,the product price,the production and marketing layout and so on.Activity based costing(ABC)holds that cost is caused by the activity.ABC assigns the manufacturing cost to activities according to the resource driver,and then assigns the incorporate costs into the cost object.Activity based costing can get more accurate cost information than traditional costing methods.Therefore,we brings the activity based Costing into the condiment industry,and explores the role of activity based costing in improving the efficiency of resource allocation,the level of cost management and the core competitiveness of the condiment industry.This paper is divided into six parts.The first part introduces the background of the condiment industry enterprises to introduce the activity-based costing method,summarizes the origin,development and application of ABC in domestic and abroad;The second part discusses the theoretical basis of ABC and its advantages in product accounting,introduces the current situation of the development of domestic condiment industry,cost accounting and the necessity and feasibility of implementing ABC;The third part,we selected H enterprises,which is the representative of the industry,as the research object of the ABC.Based on the analysis of the current situation of H company and the problem of cost accounting,we believe that H company has the necessity and the implementation basis of implementing ABC.The fourth part,we design the process of implementing ABC in H program,including determining the implemented target,establishing the objectives and principles of the process,assigning operation and operation center,ensuring the cost drivers,and putting forward the relevant strategies to improve cost with ABC;The fifth part,we collect and calculate the cost information of H company.Based on the analysis of the difference between the ABC and the traditional cost method,this paper puts forward some suggestions on how to improve the cost management level of the enterprise from the aspects of the improvement of the operation,the adjustment of the production and distribution of the products,and the improvement of the overall income of the enterprise.The sixth part is the conclusion of the whole paper,pointing out the shortcomings of the research,and looking forward to the future research of activity based costing.The study considered that it is necessary to use ABC in condiment industry,especially for the operation which has complex production processes,more products,different product resource consumption differences and large proportion of manufacturing costs.ABC can help the enterprise managers to grasp the true situation of resource consumption,find the root cause of the cost,and then implement targeted cost control strategy.It will take a long time and consume more resources to implement ABC,so the paper suggests that condiment industry enterprises should be based on the actual situation of enterprises to select the appropriate calculation precision in the implementation of activity-based costing to achieve greater cost-effectiveness.In addition,it also needs to obtain full management support.