The Study On Resource Consumption Accounting Application To Chinese Enterprises Cost Management

Since the 21st century, with the impact of global economic integration and rapid development of high tech, the business environment has undergone profound changes. The environment that organizations operate in is increasingly dynamic and complicated. As a result, organizations need a cost management system that reflects these changes in a timely, accurate manner. Traditional cost accounting is facing new challenges. During the last more than two decades cost management has focused it's attention on activity, and ABC has also become a cost management system that was been held in very high esteem. But with the deep study and practice, the disadvantages of ABC have been exposed gradually. Basing on activity this costing method use static monetary index, it hardly reflects the consumption of resources and strengthens the cost management dynamically. So, as an extension of ABC, a new cost management method, RCA came into being. In this context, this paper analyzed the theory of resource consumption accounting, and studied its application in China. Its purpose is to establish a new cost management system which is suitable for Chinese practice, by introducing modern methods abroad and improving cost management continuously, and provide new perspectives and ideas for cost management in our country's company.This paper sorted out the relevant research literature, based on the existence of issues on using of ABC, selected the topic and construction of the main research framework of this paper. The study used qualitative analysis and quantitative analysis, combined theoretical research and case analysis.Firstly, this article studied GPK and ABC, combined the two's advantages to couple RCA. Secondly, the paper analyzed the necessity and feasibility of application of RCA in China and introduced a case, compared the results of case company's application of both methods. Finally, the article proposed reference solutions to the problems that may exist in the practical application of RCA, discussed some problems which need pay attention to when RCA applies in different industries. Study shows that under the cost-benefit principle, the use of RCA will reflect the true cost situation, improve the quality of accounting information, and help business managers make the right decisions, so that enterprises will be in a favorable position in the increasingly fierce competition circumstance.