Activity-based Costing Applied In A Order Manufacturing Company

As the global competitive market continues to intensify,the saturation of external markets and the overcapacity of production are becoming increasingly prominent.In order to survive the pressure of internal and external pressures in such an environment,and order to increase the profitability of enterprises and promote their own development,traditional manufacturing industries must continue to strengthen their cost management.For order-based enterprises,customers have more and more demand for personalized products.The specifications of each order product are not the same,no longer a unified standard part,which raises the cost accounting for the product.The need to calculate product costs faster and more accurately in customer orders requires companies to find more viable ways to deal with them.In addition,the indirect costs of product production account for a larger proportion of the entire cost accounting,using traditional costing methods can not truly reflect its cost,often inaccurate quotations,corporate managers for pricing,etc.Decision making can lead to serious mistakes.It is imperative to implement a new cost management method.Firstly,the thesis discusses the related concepts of activity-based costing,analyzes the related theories of activity-based costing,and takes A-order manufacturing enterprises as an example.Based on the in-depth investigation,the company's existing cost accounting is explored.Based on the first-hand information of Company A obtained through interviews,the paper constructed the activity-based costing system for company,and proposed corresponding management suggestions accordingly.The research finds that:(1)Process complexity and order size are important factors affecting cost;(2)The proportion of design expenses in A company's indirect costs increases year by year,affecting the rationality andprofitability of order quotation;(3)The lack of communication between the single link and the design link is the main reason for the design efficiency.In response to the above problems,the recommendations in this paper are:(1)According to the operation cost information,A company needs to formulate a list of quotations that can reflect the characteristics of the order;(2)Increase the feedback mechanism with the designer in the order process,improve the order design process,and improve design efficiency.