An Application Research On Activity-Based Costing In Construction Project

Construction sector plays an important role in national economy, which is featured by low entry barrier, intensive labor, fierce competition and low degree of automation. Currently, traditional cost calculation and management methods are still used in most construction enterprises. However, as overhead expenses increasing continually and great changes having taken place in production environment, the disadvantage of traditional cost calculation is deepening more increasingly.The introduction of the Activity-based Costing (ABC) thought sets off the change of the cost management of construction industry. Although the ABC has some limitations, as a new cost management system, it also plays an important role in most of the operation of enterprises.This article analyzes the ABC by both of the theoretical research and case, to promote the ABC in construction project cost management applications. This paper is divided into five chapters. Each chapter briefly describes contents as follow:ChapterⅠ:IntroductionThis chapter explains the background, significance of this study, research methods and research content, defines the relevant concepts of the ABC, and meanwhile describes current researches on the ABC.ChapterⅡ:Analysis of the ABC’s "two-dimensional view"This chapter focuses on the process of operating cost and the concept of operating cost management.ChapterⅢ:Feasible Analysis of applications in construction project cost management by ABCThis chapter describes the features of construction industry and then analyzes the applications in construction project cost management by ABC.ChapterⅣ:Case Study This chapter carries out a practical operation of the ABC application in construction project in order to prove that the cost management mechanism established in this paper for China’s construction industry is feasible.ChapterⅤ:SummaryThis chapter summarizes the contents of this paper and analyzes the limitations of this study.