Research On The Application Of ABC In S Electrical Manufacturing Company

For a long time,due to its unique monopoly nature,military enterprises have fewer competitors in the industry also government willing to investigate more money on it.What’s more,without sales pressure and most military products are delivered on-order.Therefore,military enterprises have less sensitiveness to market competition during development and do not pay much attention to cost control.In recent years,with the development of the economy and the enhancement of military-civilian integration,the monopoly status of military products has been gradually broken,and military enterprises have begun to face fierce market competition.S electrical manufacturing company is one branch of China’s Aviation Industry Cooperation which in charge of the power system R&D and production.In recent years,with the continuous development of advanced technology,and the improvement of intelligent production,the company has introduced many advanced computer software systems,modern equipment and precision machines in order to meet the high-quality requirements of military products.The use of these advanced devices has resulted in higher indirect costs during the manufacturing process.However,enterprises have long used traditional methods to calculate costs,and use single working hour ratio to share the indirect costs incurred in the manufacturing process.As the proportion of indirect costs increases,the current allocation method obviously does not meet the needs of enterprise development,in addition,more problems are appeared with the tradition accounting and product pricing methods.In order to maintain the vitality of the enterprise and improve comprehensive competitiveness it is extremely urgent to enhance the management level and improve the accuracy of cost accounting.Based on the actual situation of S electric company,this paper intends to use the method of operation cost accounting to improve the accuracy and scientificity of enterprise cost accounting.Firstly,starting from the theory of activity-based costing and the theory of activity-based cost management,the current situation and existing problems of S-electricity’s cost accounting will be fully discussed,and then emphasis on the feasibility and necessity of applying the activity-based costing method.After that,the production process of S ElectricCompany was sorted out,the main operations were identified,and the activity-based costing accounting model was established.The cost of the product will be compared and carefully researched which was calculated by the activity-based costing method and traditional accounting method.Finally,from the perspective of activity-based costing,this paper will provide scientific suggestions and opinions for the company’s cost management and marketing strategies.