The Application Of Activity-based Cost In The Guohua Panshan Power Company

With the aggravation of the market competition, cost leadership strategy has been adopted by more and more electricity-generating enterprises in China. The theory of activity-based costing, as a new management idea, has been receiving great attention from managers due to the relatively low level of cost management among electricity-generating enterprises. The aim of this study is to explore the application of activity-based costing in electricity-generating enterprise from the case of Tianjin Guohua Panshan Power Plant. This essay first reviews the theories of activity-based costing, then, elaborates the design process of Resource library, job bank,cost drivers, cost objects of activity-based cost model of Tianjin Guohua Panshan power plant, and analyzes the optimization of the value chain by reducing non value-added activities. Finally, the author suggests that activity-based costing, compared with traditional cost management, may contribute to the improvement of competitiveness of electricity-generating enterprises.