Research On The Strategic And Standard Cost Budget Management

Budget management has the largest span and the most comprehensive concept inall management science, and cost budget management is the priority among priorities.With the continuous innovation and the development of society, economy and hightechnology, the scope of enterprise competition is growing; the internal and externalenvironment has changed a great deal; enterprises pay more and more attention to costcontrol. To strengthen the cost budget management of enterprises has become animportant task for Chinese enterprises.Although Chinese and foreign scholars have done a lot of research on the costbudget management, cost budget management still exist many problems. For example,enterprises lack strategic vision; the budget process is hasty; the breakdown incommunication between departments result that the budget lack of scientificity anddynamic; cost analysis is often limited to report regularly on after a simple analysis ofthe digital; the data that are used to analysis are historical information; there is nocomputer information system to help enterprises get all kinds of information;enterprises cannot adapt to the development of the information technologyenvironment and the business is out of line. All these problems influence the smoothimplementation of cost budget management. Therefore, it is necessary for enterprisesto explore a new cost budget management method to adapt to the modern enterprisedevelopment requirements.To solve the problems in cost budget management, this paper is based on the costbudget management theories which already exist, and fusion the strategic budgetmanagement system， responsibility cost management method and standard costvariance analysis method together to create a management method for the strategic andstandard cost budget using the ERP system. The management method is a cost controlmethod that is based on the strategic of enterprises; it uses ERP system and standard cost method to control and supervise the budget implementation process and finally itmakes quantitative and qualitative analysis according to the result of budgetimplementation.The management method is mainly used in manufacturing enterprises. Theprocedure consists of six parts: determine the strategic target, the division ofresponsibility center, make standard costing, implement plan and budget, control andanalysis, assess and evaluate. The strategic and standard cost budget emphasizes therelationship between enterprises and the external environment; makes objective andaccurate budgets and provides detailed budget implementations. The managementmethod is conducive to the full implementation of the standard cost system; promotesall the people to participate in the cost management activities; combines the costdifference analysis and the performance evaluation of cost centers and dividesresponsibilities to control the enterprise cost in the reasonable scope.In order to validate the method, the paper takes LT Company located in Yan TaiCity, Shandong Province and discusses the design process and the results ofimplementation of the tire company in detail to prove the advantages of themanagement method for the strategic and standard cost budget.The innovation of this paper is that the method for the strategic and standard costbudget is created on the basis of the strategic budget management system，responsibility cost management method and standard cost variance analysis method. Itenriches the theoretical studies. The research of this thesis is operational and haspractical significance, which will be helpful to management and analysis of costbudget in manufacturing enterprise. It will make the cost budget management work ofChinese manufacturing enterprise more in line with the new manufacturingenvironment and characteristics of times.