Research On Application Standard Cost Method In BM Enterprise

Because of severe national policy guidance in civil explosion industry in recent years, the market competition is increasingly fierce. To reinforce competitive advantages, the civil explosion industry must lower cost and improve the comprehensive management level and lower loss of resourced to realize profits. BM is a Xinjiang-based civil explosion enterprise mainly producing industrial explosives and detonating devices. As the whole civil explosion industry maintains a high level of profit rate, enterprises ignore cost control too much, leading to severe absence of cost control. As the market economy is perfected day by day and new competitors come in, the market is saturated with products, and BM’s management gradually realizes that cost control is indispensible for the development and competition of enterprises. Therefore, reinforcing corporate management has become a critical point in the management of BM in recent years.This paper mainly uses BM as the subject of case study and analyzes relevant proposals and process of the implementation of relevant standard cost methods. This paper’s exordium identifies this paper’s research methods according to the current status and managerial demand of the civil explosion industry, confirming the research methods and philosophy of this paper, plus the overview of international and domestic literature. Coming next, the theoretical section of this paper mainly introduces the connotation and accounting procedure of the standard cost method and uses the advantage analysis of the standard cost method to offer theoretical support to BM for constructing and implementing the standard cost method under the standard cost system. Through details dissection of BM, it is found that current cost management method used by BM has many shortages and the cost management does not perform well at the moment. However, the use of standard cost method in BM is very necessary and feasible. Then, based on the actual data of cost of BM in 2013, this paper formulates the standard cost for BM’s direct materials, direct labor and manufacturing cost of special products of BM, conducting difference analysis on BM’s actual cost in 2013 and the designed standard cost in this paper according to industrial standard and the opinions of relevant experts and identifying the reasons for the difference in every aspect to facilitate improvement of shortages in cost management that cause the differences. Meanwhile, this paper also expounds necessary fundamental guarantee system for the implementation of the standard cost method and analyzes concrete systems that shall be in place for implementing standard cost methods. This paper also points out that, as a scientific corporate management philosophy, standard cost methods could exert the advantages of cost management compared to traditional cost management method.Regarding the problems and shortages regarding the operational features and current cost management system and management process of BM, this paper conducts deepened analysis and changes BM’s cost accounting method to standard cost method to manage and control the cost. Through deepened understanding of BM combining relevant theories of the standard cost method, this paper establishes a standard cost management system adapting to BM, analyzes the foundation and necessity of BM in implementing the standard cost method and predicts the effect of implementing standard cost method in BM. Through the implementation of the standard cost method in BM, it could offer reference and suggestions for the application of the method in the whole civil explosion industry.