A Study Of The Application Of Activity

With the development of global economic integration, the competition from domestic and abroad is becoming more intense. The production cost structure has thus changed with the rapid development of science and technology and automatic production in manufacturing enterprises and rising indirect production costs, the traditional cost management can not adapt to modern production methods. In view of the case citations-A company also needs to improve enterprise cost management model, this paper attempts to introduce the operating cost management of Company A, Company A’s production and management,which is based on the characteristics of operating cost management, focus on its customer profitability analysis, product development, environmental cost management. This will highlight the experiences of Company A which similar manufacturing enterprises can learn from.Currently, Company A adopts traditional cost management model, in which indirect cost allocation is based on criteria of quantities. This allocation method does not fully take into account of the operation reasons, ignoring the intrinsic relationship between the different costs, hence seriously distorting production costs and misleading companies to make the wrong decisions in production. As a large auto parts manufacturer, Company A has advanced financial accounting software, and financial officers also have corresponding information office systems. From the hardware and software, Company A meets the requirements of using operating cost management method.The main contents of this paper include introduction, which describes the research background, significance and innovation. Theoretical overview section reviews the operation management and cost management theories. The applications section describes the operation cost management in the enterprise’customer profitability analysis, product development and application of environmental management. Case studies focus on Company A, whose operating cost management is typical in manufacturing enterprises. This paper also probes into the representative customers of Company A and profitability of different customers with cost management; applications in product development, this paper mainly deals with company A’ major product---hollow camshaft applications, and product development and design process aims to provide cost analysis of Company A cost analysis method; in view of environmental cost management, this paper focus on the production of two products piston rings and camshafts units were cost accounting, distribution through the job motivation, higher environmental costs and improved operations are analyzed and discussed.