Study On ZBPJ’s Cost Control

Currently, the Fiberglass output in our country is more than half of the global output, occupying a dominant position in the world’s Fiberglass production and is just in period of fast development. In recent years, due to the rapid growth of the Fiberglass capacity that intensified the market competition, the Fiberglass producers are facing with huge cost pressure. ZBPJ is a Sino-US Joint Venture, at the beginning of the Joint Venture in 2006, it has obvious technology advantage and fairly strong profitability, however, along with the vigorous development of the domestic Fiberglass industry, capacities of the local top 3 Fiberglass producers expanded rapidly and their technical level also became more and more mature, ZBPJ’s market competition advantage kept weakening, its disadvantage of high cost emerged and its profitability declined significantly. From 2011 till now it has been in a situation with tiny profit or losing money, although the product selling prices are slightly higher than the market average level, but since its cost is too high, its profit margin stead is lower than the industry’s average level. Under the circumstance, it’s the primary task of ZBPJ to reinforce the cost control. The purpose of the Article aims to further improve the Company’s internal cost system so as to decrease the cost of the products and keep a strong market competitiveness through a thorough review of ZBPJ’s cost control system, analyze to figure out the specific problems and the reasons for its the higher cost by adopting the related cost control theory and coming up solutions.The Article firstly introduced the evolvement progress of the cost management theory, elaborated in stages the formation process of cost management theory as well as its characteristics. Emphasized introduction was made on the standard cost method and strategic cost management, presented the strategic cost management system theory and the necessity for the Company to practice the strategic cost management.Through detailed and in-depth analysis on ZBPJ’s cost control situation coupled with the analysis on the Company’s cost status in way of questionnaires and industry investigations, it summed up the current cost management problems at ZBPJ and deeply analyzed the root cause.Optimized and fine-tuned the Company’s cost control plan from the strategic management perspective, recommend the Company to lower its comprehensive cost through expending production scale and supply chain integration, the Company has given a full demonstration on the plan and the plan got submitted for implementation. It will cut the production cost significantly and lift the Company’s market competitiveness following the implementation. Then, build a more rational cost accounting system by refining the cost allocation system of ZBPJ and verified the product standard cost, as the same time, introduce the adjusted standard cost and new cost accounting system to ZBPJ for case practice and fully validated the effectiveness of the new cost accounting system aligned with the evaluation on the implementation results of the new plan. Finally, put forward targeted solution for the real problems existed in the Company’s cost control and improved the Company’s cost control level.Although there are quite a few study materials on the cost control system during the production process, but it is beneficial to Fiberglass producers to set up an in-process production cost control system with effective control and give reference and instruction to Fiberglass manufacturing industry by studying the in-process production cost control system due to the special process it is.