Application Study On Activity-Based Costing In Jinchuan Group Ltd.

Activity-based costing is a method of costing which focuses on activity, distributes the costing of resource to activity according to resource consumption of activity, in which costing is finally distributed to the production and service based on theirs activity.After nearly a hundred year of developing and improving, activity-based costing has become an advanced management theory and system from a method distributing indirect costs and calculates manufacturing costs of products correctly, which provides fire-new mode of thinking and way of management for improving the overall level of management comprehensively and strengthening the core competency of enterprise. With the higher and higher level of economic globalization and marketization, the enterprise must participate in the competition between the two markets during utilizing two kinds of resources at the same time in order to survive and develop in the international market competition. Cost problem has been obtained the unprecedented attention of the management and the requirements of implement and application for activity-based cost are proposed. Meanwhile, with the rapid development of science and technology, great changes of manufacturing production environment and technology has created the condition for the feasibility of activity-based costing. The application of the advanced supervisor mode made the application of activity-based costing possible.Jinchuan Group Ltd. is an enterprise which gives the first place to processing primary material. It is very important for the development of Jinchuan Group Ltd. to provide correctly cost information, strengthen the control of cost and improve the core competency. But the method of cost accounting, which evolved from planned economic times with a core of internal planning cost, has following disadvantages. For example, program is complex, information is incorrect, timeline is bad, and decision-making relevance is weak, all of these can't adapt to the current requirement. The development statusquo and strategy of Jinchuan Group Ltd. require us to study and search the application of activity-based costing.This paper mainly investigates the applicability and feasibility of applying the activity-based costing in Jinchuan Group Ltd. based on introducing the theory of activity-based costing. According to the principle of activity-based costing, we present the significance, destination and concrete model of applying the activity-based costing in Jinchuan Group Ltd., and analyze some cases, then compare the results calculated through the traditional cost calculation procedure with the activity-based costing. The content is divided into seven parts. The first part is to summarize research of activity-based costing at home and abroad and background of the research topics; the second part is some general theories, related conceptions and fundamental principals about activity-based costing; the third part analyses and studies the statusquo of cost accounting and the applicability, feasibility of applying activity-based costing for Jinchuan Group Ltd.; the forth part brings out the significance, destination and concrete model of applying the activity-based costing for Jinchuan Group Ltd. according to the fundamental principals of activity-based costing; the fifth part analyses the case of metallurgical plant in Jinchuan Group Ltd. which applies the activity-based costing, and compares it with the original method; the sixth part comes up with the problems need to be noticed in applying the activity-based costing; the last part is the conclusion about research contents.