High-speed Train Manufacturing Activity-based Cost Management

ABSTRACT:The high-speed train manufacturing is the highest level of equipment manufacturing in China, and its manufacturing process and operating procedures are more complex than the traditional train manufacturing. So, how to balance the cost and benefit of high-speed train becomes the main problem of recent studies.Currently the traditional cost accounting method and management are still widely used in China. The Manufacturing enterprises carry over the cost step by step by using the project management approach. In the aspect of management, enterprises usually set up several teams according to their businesses and functions. So the responsibilities can not be divided clearly and the cost of management rises. In the aspect of information system, different enterprise has different level. And they all have some problems in adapting the management to the information system.Based on the ABC, this study adopted the method of theory and practices to analysis the procedures of high-speed train manufacturing and made the principles and standards of how to divide the work centers. Based on T Company's management and information system, it distributed the high-speed train operating steps into 129 operation centers. After that, it also gave some advices about how to improve their operating chains, cost management and information system. Then it designed the new high-speed train manufacturing cost accounting model.This paper has three innovations. First, based on the procedures and the ERP system, it creates a standard of operation center division, which benefits not only cost accounting but also management. Second, it makes the procedures of high-speed train clear and divides the operation center according to the real situation. Finally, this paper provides an operation cost accounting model. According to the model, we could account the cost of resource into the operation center, and then account it into the products. As to the cost of management this paper also provides an allocation method, which is more practical.