Research On Improvement Of Cost Calculation Of Chinese High Tech Company Based On Activity-based Costing

New opportunities and challenges has been brought to Chinese manufacturing industry by the rapid development of science and technology.The popularization of mechanical automation has led to a sharp decline in the proportion of the direct cost of the product,while the proportion of the indirect cost is rising sharply.The traditional cost calculation method selects single factor such as output or time of work as the allocation standard of indirect cost.The method is not suitable for the currentproduction mode.It leads to the excess cost of a product with high output,more hours,and less technical content.On the.contrary,a product with low output,less hours,and more technical content hides part of the cost.The distortion of cost information will inevitably affect the managers' business decisions,which is not conducive to the cost management of enterprise,thus affecting the competitiveness of the enterprise.Activity-based costing(ABC)calculates product cost with cost drivers,thus improving the problem of irrational distribution of indirect cost by traditional method,increasing the accuracy of cost calculation.It provides relatively accurate cost information for managers,increases the effectiveness of decision making,and it's beneficial to the cost management.Guided by the related theory of activity-based costing(ABC),this paper combines Chinese High Tech Company's characteristic of high degree of mechanization and analyzes the problems of the company's current use of batch method.It finds that product cost is inaccurate under the batch method and cost information affects price and sale of the product.Inaccurate cost information has negative effects on increasing profits and improving cost management.Therefore,we need to improve the cost calculation method and adopt activity-based costing to get more accurate cost information.This paper designs implementation scheme of activity-based costing,and it selects the automobile humidity sensor production workshop which is representative as the pilot workshop.Then it respectively calculates the product cost by the method of batch and activity-based costing,finally it compares the results of calculation,and finds that the cost information provided by the activity-based costing is more reasonable and accurate.