Research On The Application Of Activity-Based Costing In The Logistics System Of CS Automobile Company Limited

In a market economy condition, competition is increasingly fierce among companies. To win the competition, promoting companies’whole competitiveness has been managers’major problem, and cost control is an effective way to do that. However, due to the rapid development of enterprise management and the maturity of modern management mode, the reducing of material cost and production cost has reached its limit so that it is hard to contribute to the corporate profit. Therefore, companies start to pay attention to the "third profit source"--logistics, and they explore the potential of logistics management through the design of logistics process, the control of logistics cost and the improvement of logistics operation. In the logistics cost management, the logistics cost accounting is an very important part, and its correctness concerns the success of failure of logistics cost management. Thus calculating logistics cost correctly, getting a full grasp on cost information, controlling and reducing logistics cost are essential to the promoting of companies’ economic benefit.This article is based on the research of CS Automobile Company(CSAC), and it is to discuss the application of Activity-Based Costing(ABC) in the logistics system. Due to expand of CSAC’s scale, production and sales, the proportion of logistics cost in the company’s total cost is becoming increasingly higher. In this condition, the limit of traditional cost accounting method has brought a lot of trouble to the company’s logistics cost management, and to break the limit, a much more scientific cost accounting method is in sore need to provide the more accurate logistics cost information, and ABC is qualified to do this. Comparing to the traditional cost accounting method, ABC is a new cost accounting method. ABC can provide the more accurate cost information, and it is more conducive to companies’ cost control and management. Activity-Based Cost Management(ABCM) based on ABC is also a more scientific and comprehensive management process. This article is to study logistics cost management based on logistics cost accounting which is based on ABC. At first, theories related to logistics cost management and ABC is elaborated. On this basis, the current situation and existing problems of CSAC’s logistics cost management is analyzed, and then to discuss the feasibility and necessity of implementing ABC, thereby simulate the application of ABC to establish the ABCM system in CSAC to calculate and control logistics cost. With this, the problems caused by the traditional cost accounting method can be solved, such as the logistics cost information distortion and the disorder of logistics cost management. At last, through the research of the application of ABC in CSAC, several suggestions is made to the application of ABC in Chinese enterprises.This article’s expected contribution is to establish the ABCM system for the CSAC’s logistics system, solve the disorder problems of logistics cost accounting and management, and with logistics system as a pilot, to provide the theoretical support to the later application of ABC in CSAC, and also expect to promote the further application of ABC and ABCM within the same industry so that the traditional cost accounting and management system could be replaced. Due to space constraints and the personal restriction of research ability and time, this article is mainly about the research on CSAC’s logistics cost management based on ABC, but does not involve the field of manufacturing and administrating, and also not involve other industries, such as logistics enterprises, service industry and so on. This is the deficiency of this article, and it will also be my research direction in the future.