Research On The Application Of Activity-based Costing In 720 Branch Of Valin Hengyang Steel

Influenced by the global economy,the era of high gross profit of China’s steel industry is gone forever.Facing the problems of weak foundation and overcapacity,all steel enterprises have to eliminate backward production capacity,carry out structural upgrading,develop and design high-quality and high value-added products.It is an important step for the iron and steel industry to get out of the dilemma to control the cost,find a way to truly reflect the product cost and reasonably reduce the cost.Firstly,this paper discusses the research background and significance of activity-based costing from the environment of iron and steel industry and 720 branch of Valin Hengyang steel.In the chapter of literature review,this paper discusses the history of theoretical research at home and abroad and the general situation of activity-based cost application research.From the four stages of "field survey research demonstration design application reflection improvement",this paper discusses the research ideas,describes the research framework,briefly summarizes the research content,and uses the research methods of survey visit,literature and comparative analysis.Secondly,it briefly summarizes the basic theory,related elements,accounting steps of ABC,and compares the advantages and disadvantages of ABC and traditional costing from three aspects.Thirdly,the company’s status and production characteristics,the current cost accounting method of variety method and its shortcomings are summarized.Based on the improvement of mechanical automation in the iron and steel industry,the implementation of "standard + @" in 720 branch and the lag of traditional cost accounting methods,the cost structure and product varieties have changed;the management attaches great importance to the fine management of cost,the perfect ERP system,the better grass-roots management and the more perfect hardware facilities of the enterprise,Therefore,put forward the necessity and feasibility of carrying out activity-based costing in Hualing Henggang.Then,it explores the application of ABC from the accounting principles and conditions,accounting principles,accounting process and other aspects of 720 branch.According to the production process of 720 branch,7 activity-based cost centers are divided and quantified,the cost drivers and allocation rate are confirmed,and the difference analysis of the cost data of 720 branch in July is carried out by using the activity-based costing and the original costing methods.It is found that the traditional cost accounting method overestimates the cost of high-yield products and underestimates the cost of low-yield products,and discusses the application effect of Activity-Based Costing in 720 branch from three aspects,and draws the conclusion that activity-based costing can more accurately and truly reflect the cost of products,So it analyzes the reasons for the differences in the application process of ABC in 720 branch and the aspects that need to be improved.Finally,six practical suggestions and corresponding conclusions are put forward for the optimization of activity-based costing.Before the application of activity-based costing,the activity chain should be fully dissected,the actual situation in the application process should be comprehensively considered,the problems should be adjusted in time,and the dynamic optimization and upgrading of activity-based costing should be carried out.