Study On The Application Of ABC To The YiNing Coal Group

With the development of production technology, the ratio of indirect cost in the total cost of coal is greater and greater, and the result is not precise and true by the traditional means to calculate the cost. The traditional cost accounting method, based on the smaller proportion of indirect cost, can't suit for the modern production. Because of the homogeneity of coal production, cost competition is one of the most important means in the market competition. Who got the upper hand if got the superior in the cost competition. In the thesis, the YiNing coal group is an automatic mechanized enterprise, however, it still takes the traditional cost accounting method. As a result, there are so many problems such as the wrong result of cost accounting and the wrong price strategy and so on. Because the advantage of Activity based Costing, in this thesis I try to applicant the ABC in the YiNing coal group to help this company to improve its cost accounting. All the same, the coal enterprises have the similar production model, hoping this thesis could do some favor for other coal enterprises.Presently YiNing coal group uses the conventional method to calculate the costs, which distribute the indirect overhead expenses to coal products with singular production distributive motivation. This allocation method severely twisted the cost of production, and it makes the decisions unreasonable if groups use these cost information. YiNing coal group's cost management situation is even worse because its formalization. Now the finance department works in isolation, and makes the cost report only at the end of the month. Worse still, is that they do not analyze and seek the reasons of the cost differences, which makes the cost control report useless. YiNing coal group's recent financial calculation software is Yongyou NC system, and every production department has its own information system, so it is necessary and possible for YiNing coal group to use the Activity-based Costing. This paper's firstly states the study background and the skeleton frame, then summarize the related theory of ABC. The key part is the third and forth chapter, and those two chapters combines the operational characteristics in the coal groups and the theory of cost management to illustrate the ABC calculation and management practice in YiNing coal group. In the aspect of coal cost calculation based activity, the study divides the production process into several activity centers and sets up the corresponding activity cost pools based on coal group's activity analysis and drivers analysis, and establishes the model of raw coal and refined coal's cost calculation. In the aspect of coal cost management based activity, firstly the study analyses the important activity of coal group, and provides suggestions for improvements, promote cost management and improve the management level of cost control. The author drew on Kaplan's Balanced Scorecard theory when established the activity-based performance measurement system, and YiNing coal group's ABM system includes activity analysis, activity improvement and activity basic performance evaluation. At last, we give the conclusion of this paper and some suggestions of how to implement ABC to domestic coal business.