A Study On The Application Improvement Of Activity Based Accounting In The Company X

With the rapid development of global economy,as well as the continuous improvement of the value added highly technology,the car industry,which has significant feature of dispersed manufacturing industry,is facing a far more competitive situation than ever before.For instance,the Chinese auto market is appearing a real intensified competitive situation,since both of the Asian auto companies and the European auto companies are struggling into the market share,even the local brands are sweeping into this competition.All the above mentioned car companies have realized the importance of the updating of the highly developed technology and the upgrading of the products,as a result,to narrow down the profit margins and to tightly control the cost management have drawn far more attentions then ever before.Therefore,it has become more and more important for all the managers in the auto companies to clearly define the cost breakdown of their products and clearly grasp the profit margins of each products in such a highly competitive environment.Since their decisions and judgments might affect the profitability and market capitalization of the final state of the business.This paper illustrates the X company,a car company,to show how she uses the activity based costing method under the SAP system environment and what application mode it is.And the details of the application and some concerns and problems existed during the application process are also stated in this paper.At the beginning of this paper,the paper focuses on the domestic and foreign research of the background of activity based costing,and the basic principles and related theories are also introduced in the paper.And the follows are the introductions of the application status of the activity based costing in X company.In the meantime,the paper also contains in the later part some suggestions and solutions regarding to the problem during the application of the activity based accounting.In the end of this paper,the Arthur expresses her idea of the application and development of activity based accounting and points out the directions which should be followed in future and she also hopes the ideas she raises could help X company to improve future development and cost management.That would also be really exciting if her idea could help others who are doing research on activity based accounting.