The Application Study Of Activity-based Budget In LA Company

With the development of economy,China's foundry industry has a good development trend and broad prospects.However,in the face of the slowdown of domestic economic growth and the downward pressure on economic operation,manufacturing industry is also in a downturn,and the development of company is facing great opportunities and challenges.In the face of fierce competition,the innovation of management mode has become an important measure to protect the economic benefits of enterprises,and budget management,as an effective tool of enterprise management,can effectively control the cost and become more and more favored by managers.Activity-based budgeting is a new budget method based on activity-based costing.It starts from the enterprise strategy,constructs the complete system including budget preparation,control and assessment.At same time it analyzes and improves with the activity as the core,which is conducive to the rational allocation of resources and the improvement of economic benefits.In this context,this paper proposes to establish activity-based budget system for LA company,expecting to strengthen its budget management level,effectively control costs and improve economic benefits.Based on the relevant literature review,the author uses the research method of combining theory with practice,takes LA company as the research object,provides a new idea for La company to improve its budget management system,including budget preparation,control and assessment.This paper first studies the research background,research status and related theories of ABB,then describes the basic situation and budget management status of LA company,analyzes its existing problems,such as unscientific budgeting methods,inadequate budget control,imperfect assessment system,and explains the necessity of implementing ABB in LA company.Then,in view of the existing problems of LA company,this paper proposes to build a basic operation budget system for LA company,which is designed from four aspects: the determination of budget objectives,budget preparation,control and assessment;when determining budget objectives,it is carried out in combination with the operation;in the budget preparation process,it is carried out according to the principle of "product consumption operation,operation consumption resource",combined with the company's production process,to identify the operation,activity center and cost driver,to build the budget model of product activity cost,resource demand and core resource demand value for the company;budget control link,taking activity as the control object,activity level as the control center,through activity control,eliminate non value-added activities,improve activity efficiency,to reduce activity cost;in the process of budget assessment,to refine the assessment indicators to operation center,combined with financial indicators and non-financial indicators to improve the evaluation index system.Finally,in order to ensure the smooth implementation of ABB in LA company,the safeguard measures are put forward.It is hoped that ABB will help the company improve the budget management level,achieve the purpose of cost control,and ensure the sustainable and stable development of LA company.