Research On Production Cost Control Based On The Activity Based Costing

With the market economy developed all of the world, all kinds of enterprisescreate a wealth of products and services, but the survival environment andmanagement situation enterprises are facing is becoming more and more serious,especially to the manufacturing enterprises. In cracks of the fierce market competition,facing products form about many varieties and small batch, in order to participate inmarket competition more effectively, enterprises must have a good cost accountingmechanism to reflect the true costs of real products or services. More and moreenterprises realize that traditional cost accounting mechanism has certain defects,which can’t provide the correct decision-making for the enterprise production andoperation management, saying of the tiny, make enterprises thin profit and runninguncomfortably, saying to the large, may lead to enterprise managementdecision-making errors by cost accounting errors, and even loss of bankruptcy ofenterprises.Enterprise cost management methods include the cost of traditional costmanagement method and modern management methods, this paper briefly describesthe development of cost management history and the research status at home andabroad, describes the differences between the traditional cost management andmodern operation cost management. The cost structure of the product includes twomain aspects: one is the direct cost directly assigned to a particular product; the otherinvolves indirect costs, the traditional point of view can only distribute to a specificproduct according to certain proportion, and the Activity Based Costing method isbased on "operation" for the cost accounting, operations need to consume resources,in accordance with the resource cost it is concluded that the operation cost; Productsneed to consume operation, according to the work motivation allocation rate, theproduct cost are obtained.In this thesis, with three typical of enterprise product as the basis of costaccounting data, the cost of the product data were accounted by the traditional methodand modern ones, respectively, and the actual sale price was made according to thetarget cost of enterprise. With two kind of cost accounting data as reference,combining with the sensitive way from market of this enterprise product sales price,the actual cost accounting products was test. It is concluded that, by different cost inthe case, for the typical modern manufacturing enterprises with many varieties and small batch feather, the traditional cost accounting method could not provide thecorrect data for decision-making, and may even provide the wrong data and result inthe wrong decisions. Based on the discussion of operating cost theory, combined withthe actual IP company’s cost accounting cases, we hope that more Chinese enterprises,especially manufacturing enterprises, will learn to use the ABC method, accountingenterprise’s product cost accurately and make sense to improve the enterprise costmanagement level.