Activity-based Costing Analysis Of E’s Program Based On Lean Production

Lean production(LP)is the ideal mode all manufacturers wanting to learn and know well.Since good products can be made out with little cost by it.Nowadays,lots of Chinese manufacturers are practicing LP.But LP requires more accurate product cost which makes the old accounting inefficient,and Activities-based costing(ABC)is the only right method.However,it’s not widespread in combining LP with ABC for business management in such kind of enterprises.This article takes E company,an automobile part manufacturer using LP,for example to introduce its current condition and cost problems calling for appropriate solutions.It’s finally proved by this fact that ABC is so important to E’s management.With this conclusion,the framework of lean cost management system combining LP and ABC is set up meeting the need of E company.And ABC is applied in this article to reassess and recalculate cost of CMA program.The explicit data analysis concludes that ABC is the best approach for LP and cost reduction.LP and ABC are two complementary tools,LP helps ABC well classify activities,in the same time,ABC provides precise cost data.By research on the implementation of LP and ABC in E,hoping enterprises facing the same trouble with E will be enlightened on some ideas of how to use ABC and build their own lean cost management system.