Research On The Activity Based Cost Control Of A Textile Enterprise

With the rapid development of information technology and the improving of the degree of market competition, enterprises want to take the first place in such an environment background, there are still some challenges. Due to the continuous improvement of the price level and the increasingly scarce labor, companies are trying to improve the labor productivity through the compression of raw materials price and reduce labor costs, obviously this space is limited. However, with the continuous improvement of the level of mechanization and the expansion of the scale of the current textile enterprises, the previous labor is being replaced by the gradual use of advanced equipment and technology. Textile enterprises want to get more and more profits in the competitive market environment, it needs to use the best implementation methods, that is, activity based costing control method. With the method, enterprises can effectively improve the living environment and enhance the market competitiveness. Currently A textile enterprises lack awareness of cost control,so it still use the traditional cost accounting method, which mainly focus on product indirect costs and volume of business association. With the low proportion of product costs components, such as direct material costs and direct labor costs to distribute the indirect costs, there is clearly unreasonable under the present conditions of production. This will make the distortion of cost information and bring errors to the enterprise management decision. In addition, with the expansion of enterprise marketing, product diversification and upgrading of the process will make the enterprise’s indirect cost allocation rate is in a state of change, thus affecting the accuracy of distribution. However with textile enterprises continues to expand the scale, product diversification, increase the difficulty of cost control, using the ABC method of accounting can greatly improve the production efficiency of enterprises, while ensuring that the business cost is minimized.This article will explore activity-based cost control application in textile enterprises, and specifically to a textile enterprises selected as the typical research object, combined with the enterprise’s actual situation through carries on the analysis to the problems existed in the current cost control present situation and the cost control, compared to the scope of application of the control method, is selected for the enterprises operating cost method, the activity-based cost control design, the specific process, including activity analysis, activity cost accounting, difference analysis and control.A textile enterprises using activity-based costing control, to a certain extent, not only optimize the cost management of enterprises, but also reduce the cost of enterprises, so as to achieve the purpose of improving the profits of enterprises. It is found that activity based cost control is actually a process of overall control, and the long-term strategic project should be viewed with a strategic perspective.