The Study Of The Implementation Of Activity-Based Costing In JL Machine Tool Plant

Cost accounting is not only a financial issue, but also has relationship to efficient management. An excellent costing accounting system has great merits for reducing cost of the enterprise and increasing profits. Besides, a fine costing system could promote the competitiveness of the group with developing the right price or financing decisions, such as pricing, financing, etc, in the high competitive market. In addition, it is possible to optimize the producing process while improving the costing accounting system through value chain analysis. And this could make effort to raise the competitiveness of the company through both production and finance.As an advanced cost accounting methods, activity-based costing (ABC) originated from the United States at the beginning of the 90th century. After about 100 years development, ABC has established a sound theoretical system. And with the development of production automation and management informationization, this accounting method has been successfully implemented in various industries. ABC is not only an accurate cost accounting system, but also an advanced business management. It promotes the finance system while optimizing the production process, by the combination of the two. And it has a great significant to the enterprises in a fierce competitive market.JL Machine Tool Plant is a subsidiary of GR Group producing ordinary milling manufacturers. Before the ABC system, it had taken the fixed cost method as the basic tool of production cost accounting. However, with the development of the producing technology and the process optimization, the proportion of the overhead cost increases, and the traditional cost method went outmoded. Even it had some negative affects on the decision making. This paper discussed the environment of the JL Machine Tool Plant, and found that there had been a favorable environment to implement the ABC. Based on the basic theory of activity-based cost accounting, this paper made a feasibility analysis of the use of ABC in JL Machine Tool Plant. Besides, it argued the differences of the cost of products between the results of the traditional cost accounting and the ABC's. At last, it proposed some problems in the implementation of the ABC in JL Machine Tool Plant, and gave some apocalypses.