An Research On Application Of The Activity-Based Costing Theory In DX Company

Since the continuous development of productivity and in order to take advantage in the fierce market competition,enterprises begin to purchase in large quantity to improve its production efficiency.The variation of production environment has changed the percentage of direct and indirect expenses in the original products.Indirect expenses are rising,while direct expenses are declining,thus bringing a problem: the traditional cost method hasn't adapted to current production and operation conditions.Employing single cost allocation method can't distribute the cost of production properly and reasonably or provide accurate basis for the production and operation as well as the pricing strategies of the enterprise's products.In addition,inaccurate cost information will mislead the enterprises to transfer the productivity to the products with low margin or in the red.Entering into the smart lock company,DX lock company still adopts the cost accounting method of traditional mechanical lock,instead of cost accounting and external quotation of the products.If this situation is not changed,DX lock company is likely to be confronted with the situation of insolvency and bankruptcy.In order to solve this problem,the paper introduces the activity based costing method to DX company.The activity based costing method allocates the resources into different activities according to resource drivers and it allocates the expenses into products according to different activity drivers,in favor of calculating the cost of products correctly and reasonably.This paper has used a large number of research findings domestic and abroad for reference.Starting from the basic theory of activity based method and on the basis of clarifying the definition and basic principles of the activity based costing,this paper studies and analyses its advantages and disadvantages with traditional cost accounting method.Through analyzing the company,the problem of cost accounting has been pointed out,which mainly contains four aspects: product cost information distortion,product cost pricing,product profitability analysis and cost expiration.And then the necessity and possibility of DX lock company implementing the activity based costing have been analyzed.After that,the product production process has been classified by activity,nine activity centers have been built,resources are collected and distributed according to cost drivers,and the product cost under the cost based method and the product cost under the current cost method have been comparedand analyzed,thus providing the reference information for the product production strategies of DX lock company.Finally,the safeguard measures and conclusions relating to implementing the activity based costing have been pointed out.Through studying and analyzing the DX lock company,the paper considers that the activity based costing not only adapt to company's cost accounting,but also should become a kind of management thinking of strategic cost applied to the company's production and management.