Application Research Of Activity-based Costing In HYY Company

Due to the continuous improvement of production technology,enterprises have purchased a large number of advanced machinery and equipment in order to enhance their competitive position in the same industry and improve production efficiency,resulting in an increase in the proportion of indirect costs in product costs,while the proportion of direct costs is falling.This situation shows that many companies can no longer rely solely on traditional cost methods.On the one hand,the traditional cost method cannot allocate the indirect cost reasonably by using a single allocation standard.On the other hand,the resulting cost information is inaccurate.It may mislead managers and influence managers’ judgments on business decisions.As an advanced cost management method,activity-based costing can more accurately allocate indirect costs,thereby improving the rationality and accuracy of product cost information.This article takes small and medium-sized manufacturing company HYY Knitwear Co.,Ltd.as an example,trying to introduce the activity-based costing method into the enterprise,so that the company’s cost accounting method is more accurate,thus gaining the advantage of market competition,and also providing reference for other knitwear manufacturers.And the article mainly used the literature research method,the field research method and the comparative analysis method.Based on a large number of domestic and foreign research results,from the concept,principle,accounting steps and other related theories of activity-based costing,the current cost accounting and management status of HYY is analyzed.And it obtains a specific application system of activity-based costing in HYY,so as to simulate the whole process of operation costing in HYY,and compare the calculation results of two costing methods.Based on this result,some suggestions for cost management were obtained.Finally,through the above research and analysis,three important conclusions are drawn:(1)HYY has the conditions for implementing the activity-based costing method,and can apply the activity-based costing method.(2)The activity-based costing method is more applicable to HYY than the current traditional costing method.And the accounting results of activity-based costing method are more accurate.(3)If HYY company actuallyapplies the activity-based costing method,it is necessary to pay attention to the precautions in the implementation process.Conducted on-the-spot research on small and medium-sized manufacturing company HYY Knitwear Co.,Ltd.,and designed a set of cost accounting solutions for its own characteristics.At the same time,the simulation operation cost method was implemented in the enterprise and the result.Above these all were the innovation of this article.The ultimate goal of this paper is to put forward suggestions on cost control according to the company’s specific conditions,and hopes to provide a realistic reference for HYY’s future costing and cost management through research,and also provide some reference for other companies of the same type.