Research On WH Cigarette Factory’s Activity-based Standard Cost Control

This year is the fifteenth year that our country joins in WTO. Our country has already stepped into the economic globalization age, but the external competition our country’s enterprises face with also becomes more complex and fiercer. With the gradual development of scientific technology and the broad application of information technology, equipment production efficiency continuously improves and the cost scope involved by enterprises’ daily production activities also becomes broader and broader. In terms of products needs, consumers not only pay attention to satisfy usability, but also consider personalized needs, therefore domestic manufacturing enterprises’traditional production pattern of mass production on single product has shifted to production pattern of small production on multiple products. In this pressing environment, it requires manufacturing enterprise’s cost control shall be at the same pace with production structure transformation and requires lowering down product cost through scientific and efficient method.According to the theory of traditional cost calculation, the cost calculation can be generalized as the resource consumption in the production process covered by cost collection. The biggest issue of traditional cost method is that it consistently takes product as the object of cost collection, but this allocation method would cause the chaos of resource distribution among products with different batches or different techniques. On one hand, this twisted product cost information would influence decision-making analysis of enterprise’s management layer. On the other hand, the enterprise cost control system built on traditional cost method may lose control on product cost.Activity-based standard cost method essentially is to integrate activity cost thought into standard cost theory, discard view of taking product as core of cost control, but take activity-based accounting object and activity standard cost as key, analyze reasons for cost difference through comparing the difference between practical activity cost and standard. This paper starts from the angle of activity cost and provides strategic cost control system comprehensive guarantee, thus forming cost control system. But in the process of activity cost application, many enterprises have a lot of incomplete places, such as unreasonable resource allocation, lacking cost control standard makes cost control have weak effect, emphasis on financial indexes relating to cost accounting such as material and cost, but not on some indirect indexes directly constructing cost hard to manifest on cost information.Therefore, through the study on the cost control methods, based on the activity-based standard cost control method of, the domestic and foreign scholars in drawing lessons from the research results in cost control, and WH Cigarette Factory cost control present situation analysis, find out the cost control needs to improve the shortcomings, on activity based standard as the core, the WH Cigarette Factory based on standard costing control system construction and idea of cost control standard dynamic continuous improvement, in order to perfect WH Cigarette Factory cost control, and hope to give other cigarette manufacturing industry counterparts to provide some reference.The innovative point of this paper is to propose taking WH Cigarette Factory’s production and operation procedure as basis and standard as core, define cost object and cost content, make cost control standard through identifying factory cost management and contents and elements in control activity to build cigarette factory’s activity-based standard cost control system. The objective of this research is to further optimize enterprise’s cost control system to improve enterprise’s economic benefit.