Research On Cost Management Of Hefei Meiling Co., Ltd. Based On Internal Control Theory

Since 1990, tremendous changes have taken place in household appliances industry in domestic market and international market. Foreign brands come into domestic market one by one. In the other hand, economic crisis has decreased the market's demand. With the increasingly tense competitive environment, there are strategic risk and market risk in Chinese household appliances industry. The significant of a company's advantage and disadvantage is determined by its relative costs and singularity, and low cost become one of the most important standards to measure an enterprise's competitiveness. Strengthening cost management and reducing costs effectively have been extremely important in the enterprise business strategy. It fundamentally determines the strength of the competitiveness of enterprisesHefei Meiling Co., Ltd. is one of the representative enterprises in refrigerator industry. How to steadily increase its market share and to enhance the competitiveness are the urgent work to address. In the first part, the paper introduces the theory of internal control and theory of cost management. In the second part, the paper analyzes the feature and current situation of cost management in Hefei Meiling Co., Ltd., and points out the importance of cost management model in the company. Basing on this, this paper, using basic methods of internal control and combining with the concept of strategic cost management, constructs the framework of strategic cost management for Hefei Meiling Co., Ltd.. In the last part, for the company's high risks and problems which are needed to improve, and making operation activities for the horizontal axis and cost factors for the vertical, the paper has designed the ideas of the strategic cost management framework in the specific context of cost control activities. There are designing stage (designing spare part general rate cost control), purchasing stage (resource raw material, heavy pass material procurement cost control), producing stage (half-finished product self-restraint rate, person effect cost control), cost control stage (to implement overall budget management cost control), and so on.When designing the content of specific cost control activities, this paper pays heavy attention to cost driver analysis and innovation of views about cost control and management. Combined with the deficiencies of cost management and control of Hefei Meiling Co., Ltd., this paper focuses more on the designing of hidden cost elements. It will be more targeted and more practical interoperability.