Study On Control System Of Enterprise Cost On The Basic Of ABC Method

With the development of economic globalization, the enterprises are facing more andmore fierce external competition environment since the1980s. Network technologychanges quickly, the product cost structure of the enterprises’ production managementbecomes complex increasingly. The needs of customized products promotes theproduction from mass produce type to many varieties small batch conversion. Themanagement ability needs to be improved under these circumstances. To establishscientific and rational cost control system of the Enterprise is the key factor for theenterprises to reduce operating costs and improve the competitiveness.The traditional cost system gradually reveals its inherent drawbacks, and could notadapt to the great changes of the internal and external environment. The activity-basedcosting emerged, the theoretical basis of the operating cost: products consume activitiesand activities consume resources. The method overcomes the shortcomings, the unevendistribution of indirect costs, of the traditional cost accounting methods. First, the productsor services of company is broken down into many activities. Then the cost is broken downinto the appropriate activity or activity cost pools. Finally, cost of these activities or theseactivity pools of will be assigned to different products through the best operating costdrivers. The method provides a new idea for allocated indirect cost in the modernmanufacturing environment. However, the activity-based costing has the single and staticcontrol standard which would result the control effect of the cost control system. Basedon that, the paper will introduce the concept of dual cost control standards and establish anew operating cost control system on the basis of activity-based costing and cost control ofexisting theories. Hope to have innovation or development in the following aspects bytheoretical analysis and case study:(1)From the perspective of the activity-based costing, the paper will built the controlsystem based on activity-based costing for pre-product, in-product and ex-product controlof cost to improve the cost control.(2) Based on the characteristics of the humanistic management, continuousimprovement and dynamic adaptability, the paper will put forward the double standardcost control concept with "basis-model", and appily it into the cost control system on thebasic of ABC Method.(3) On the basis of theoretical analysis, double standard cost control system theory will be used to the actual production cost control, combined with the actual cost data of theCQYP company. The paper will provide further guidance for this new operating costcontrol system in the establishment and enterprises operation. Finally, the paper willprovide recommendations on the use of cost control system on the basic of ABC Method.