A Study On The Application Of ABC To Hehe Hardware Product Company

With the progress of technology,hardware manufacturing enterprises are more and more mechanized and intelligent.The ratio of labor costs in total production costs has dropped while that of indirect production costs has been growing.So traditional costing methods no longer fit the modern production mode.At the same time,due to increasingly fierce competition in the industry,higher requirements have also been put forward for cost management.ABC uses related operations as the object of cost accounting,and operating volume as the basis for cost allocation.It solves the shortcomings of the traditional costing methods fundamentally,and provides a good basis for enterprise costing management.Therefore,I attempt to introduce ABC into the case company,with a view to helping to improve the cost accounting and management of case company.Hehe Hardware Product Company t has achieved a high degree of mechanization and automation in production but still adopts the traditional cost accounting methods,leading to so many problems such as product cost distortion,inaccurate product pricing strategy,and inadequate cost management.Based on the existing theories of domestic and international researches as well as relevant theories,this paper analyzes the current situation of cost accounting in case company and discusses the necessity and feasibility of applying activity-based costing method.According to the principle of activity-based costing,I put forward the principle and procedure of applied case-based costing for case company.This article takes the production order of May 2017 as an example,compares the result of the ABC calculation with the result of the traditional cost method,analyzes the causes of the difference,and applies the cost information in order to improve the level of enterprise cost management and support product pricing and operation decision,such as:determining product pricing through activity costs,improving production processes through activity analysis and improving performance evaluation through job performance.Finally,the article summarizes the problems that ABC should pay attention to and proposes relevant safeguardsin order to control the cost of enterprise and optimize the cost management of the enterprise.The purpose of this paper is to put forward the procedure to Hehe Hardware Product Company on the application of ABC,with a view to providing references for the application of ABC on other hardware product companies.