Research On Enterprise Cost Control Based On Activity - Based Cost

Today, information technology is highly developed; to access information becomes extremely convenient and inexpensive, it’s almost impossible for enterprises to maintain long-term leadership in the industry with a single’advantage’. And the product differentiation is becoming less distinct; the company who can achieve and maintain cost leadership will lead the industry if his quotation is equal or close to the average level of industry. Obviously, cost is an essential element which related to the survival and development of enterprises. With the emergence of the Chinese demographic dividend inflection point, the labor cost increased continuously, the land price, logistics and other production factors are also on the rise, manufacturing industry is difficult to get financing as a high threshold and high financing cost, meanwhile global market competition is fierce along with the rapid development of technology and economic globalization, Chinese manufacturing industry is facing unprecedented competition pressure. How to win a space in the market competition? Cost control and scientific decision no doubt is one of the key factors. Accurate and timely information of product cost which is provided by ABC is very important for enterprises to reengineer the business process, pricing product, analysis product profitability and customer value, improve business strategy. It is also respected by more and more domestic manufacturing enterprises.In this paper, based on the characteristics of manufacturing enterprises, in the case of ’CHERVON Industry Company’, refer to the theory of ABC, we studied the cost accounting and cost control in the process of production and discussed the necessity to implement ABC in the enterprise, moreover, explained the advantages of ABC system in the product accurate cost accounting perspective. Using qualitative and quantitative methods, demonstrated the feasibility of ABC implementation in the manufacturing enterprises, in order to solve the vulnerability of cost control in the manufacturing processes.At first, the paper described the background and significance of activity costs, analyzed the basic concepts and accounting process of ABC. Secondly, it analyzed the status of cost control and related problems under the traditional cost accounting methods; furthermore, the feasibility of ABC implementation in’CHERVON Industry Company’ has been analyzed. According to the actual situation of’CHERVON Industry Company’ ABC was implemented in the process of its cost accounting process, found the advantages of ABC in the cost control aspect through the difference comparison of cost accounting between the traditional method and ABC method, and summarized some solutions to resolve the problems in the cost control process in’CHERVON Industry Company’. Finally, summarized the utilization of ABC in enterprises’cost control and looked into the future of ABC.