Study On Application Of Activity-Based Costing In JE Motor Company

Under the externally diversified customer’s needs and preferences the enterprise manufacturing costs are increasing in the state-of-the-art manufacturing environment, which leads to the fact that allocating a large proportion of manufacturing costs on the basis of simple labor hours will inevitably bring about errors in cost allocation. The significance of this study is to change the backward cost accounting concept of enterprise, to improve the accuracy of corporate cost accounting, to provide effective help and guidance for enterprises that successfully control their cost by Activity-Based Costing. The paper also reduces the risk of implementing and applying Activity-Based Costing during the process and improves the success rates of using Activity-Based Costing to carry out cost management and control in our Country.This article is divided into five parts. The first part analyzes the background and significance of this study, current related study at home and abroad, the framework and main contents of this article; The second part outlines the brief basic theory of activity-based costing and its related concept; The third part conducts analysis on the costing status of the JE Motor Company, and points out the problem of the company’s cost accounting which needs to be solved by using activity-based costing; The fourth part introduces the implementation and effect of activity-based costing application in JE Motor Company. The activity-based costing firstly requires the new organization structure design and procurement process of recycling. Then we describe the specific operating cost method steps to draw the accounting results in activity based costing. After these we compare the analysis and cost information before and after the implementation of activity-based costing. The fifth part analyzes the problems of JE motor company during the application process of activity based costing, and proposes safeguards. With application of ABC(activity-based cost) in JE Motor Company, this thesis theoretically and practically solves the problem that the manufacturing expense was underestimated in small-batch, many-time-lot products, also proceeds the application design of ABC bookkeeping and ABC management in JIT(just-in-time) enterprises.