Study On The Application Of Activity-based Costing Of Aspen Cement Products Company

The policies of reform and opening up has brought the huge changes to China.With the rapid growth of Chinese economy,Chinese enterprises are facing unprecedented opportunities and challenges.In the cruel marketing competition,cost management has become an important part of enterprise management.With the improvement of mechanization of production and the product manufacture tends to more varieties,small batch,the traditional costing method has already shown a lot of drawbacks,such as the cost distortion caused by unreasonable allocation of indirect cost and narrow scope of product cost.Under these circumstances,the accuracy of cost accounting are affected.The traditional cost accounting method is mainly reflected in the afterwards control which cannot conduct effective supervision and control of nodes in the process of production and management.Activity based costing(ABC)is an advanced costing method adopted by many enterprises in western countries.Activity based costing brings new model to cost management of enterprises.This article takes Aspen cement products company as an example,introducing new concept of cost and distribution,in order to design ABC application for the company.Firstly,this article elaborates research background and research meanings analyzing the development of activity based costing from two aspects: theoretical development and practical application.Secondly,summarize the basic concepts and theoretical basis of activity based costing which provides theoretical support for the application design of the following text.Thirdly,analyze the current cost accounting situation of aspen company in order to find out the problems in the process of cost accounting.Fourthly,embarking from the actual problems,introduce activity-based costing method based on standard costing method to design activity based costing application.Then calculate the product price under activity based costing,analysis the causes of product price difference under two accounting methods.Lastly,predict the problems that may be encountered in the application of activity based costing in aspen company and put forward some suggestions.Through theoretical analysis and case study,the main conclusions of this paper are as follows:(1)as the production model of aspen cement products has many varieties,small batch characteristics as well as the indirect costs for auxiliary material consumption and equipment depreciation and other factors have a higher proportion of the production costs,activity based costing can be applied in the company;(2)by comparing the difference of product cost under ABC and traditional cost method,the advanced and superiority of activity based costing in cost accounting is revealed to contribute to the cost accounting system and put forward new ideas in enterprise cost control and scientific management of aspen company;(3)in the application and promotion of ABC,as production methods and sales model changes,indirect costs gradually increase.Whether the distribution method of indirect cost is reasonable or not affects the accuracy of cost information.Therefore,activity based costing as a more scientific,more reasonable cost accounting method,its application in small and medium enterprises have certain feasibility.