A Research On Purchasing Costs Accounting Of Cement Corporation H Based On Time-Driven Activity-Based Costing

Abstract:Cement industry is an energy-intensive resource industry. However, excess capacity, declining sales volume and sales prices have weakened the profitability of the cement industry. For Corporation H, to gain competitive advantage and maintain sustainable development, there must be greater improvement and development in the cement’s procurement, production and other important links. Among these, improving purchasing cost management would seem significant. However, the traditional procurement costing methods have been difficult to support a new type of purchasing cost management. Therefore, introducing a new type of cost accounting methods is imminent.As the improved method of traditional Activity-based Costing (ABC), Time-driven Activity-based Costing (TDABC) is not only easy to operate, but also has improved the data collection, cost driver rate calculation and the model update. More importantly, it can provide more accurate and more decision-making related cost information. In order to help build more scientific procurement cost accounting model, this paper will introduce TDABC to H Company, hoping can improve the accuracy of purchasing cost calculation.This paper describes the background and basic principles of TDABC firstly, and then points out the necessity and feasibility of the implementation of TDABC in H based on the situation analysis of H’s procurement costs accounting and problems. Secondly, divide H’s purchasing activities after the studies of purchasing business processes, and then build a costing model based the purchasing activities. Finally, apply the model in H’s specific procurement operations. Then analyze the accounting results comparatively and put forward some corresponding measures of procurement costs management, including purchasing activities and supplier relationship.