Improvement Of M Corporation's Cost Management Based On Activity-based Costing

In recent years,due to the increase of labor force cost?instability of currency exchange rate and multiple macro-environmental pressure's common effect,domestic traditional manufacturing enterprises have been into the momentous age of increase mode conversion.Textile industry,as one of the most important industry in present economic structure,has lost its cost advantages.Textile industry is in a high-cost era.To deal with the risk caused by high cost,it is definitely required for textile industry corporations to enhance its internal cost management level so that the textile corporations can survive the fierce market competition.Activity-based costing,as a significant means to progress in cost management,can avoid creating disadvantages in traditional costing and there are quite a quantity of activity-based cost method application precedents in all kinds of industries.Through case analyzing?fieldwork,the author believes that the production process of textile industry matches the application prerequisites of activity-based costing and the corporations require an activity-based accounting system to improve their cost management on the whole value chain.There is an expectation that corporations will use more precise cost information to make decisions.Improving corporations' cost by using activity-based costing scientifically will upgrade the corporations' internal cost control more deeply and bring more economic benefits.In this thesis,the activity-based costing applications are summarized and summed up on the basis of activity-based theory and application research proposed by scholars around the world.Through using case study method,analyzing M corporation's cost management problems and draw on experience of successful cost management case from both domestic and foreign corporations,an activity-based outline for M corporation has been scientifically designed.Then comparing the product cost calculated by activity-based costing and the product cost calculated by M corporation's current traditional costing,the reasons of these 2accounting method have been analyzed.In the end of the case,it concludes that there are 6 positive results brought by M corporation's activity-based costing application.