Research On Activity-based Costing Application Of The ADNT Company

With the high-speed development of Chinese automobile market,there is fierce competition between auto components enterprises.The accuracy of cost accounting is an ambition to every auto components enterprise,but also is a big challenge.Activity-based costing(ABC)methodology,a kind of advanced cost accounting method,is applied in more and more auto components companies.The core concept of ABC method is "cost consumes activity,activity consumes resource".The purpose of this article is to apply ABC method by intensive research of activity-based cost drivers,which transformed from traditional cost accounting way,can provide more objectivity and accuracy result that can help a company to improve management level and strategy basis.ADNT is a lead company in auto seat component supplier companies.This is a Case-study thesis which discusses necessity and feasibility of ABC method used in ADNT Company.It states that how ADNT Company accounts cost by adopting appropriable and applicable cost drivers according to actual consumption.By applying this method,ADNT Company not just considers manufacture factor,but also considers other indirect manufacture factors such as purchasing,quality inspection,human resource,sales and so on.Based on ABC principle,the definition of product cost is extended.It can be regarded as a Total cost management methodology.The result by approaching this method is more comprehensive and accurate to a company.The structure of this thesis is:Chapter 1,Introduction.It explains background,research topic,research method,creation and application.Chapter 2,domestic and oversea literature review.Chapter 3,the concept and theoretical basis of ABC method.It defines the ABC principle and discloses the difference with traditional costing account,and also expounds advantaged of ABC method.Chapter 4,introduction of ADNT Company and it discloses its problems.Chapter 5,provides optimization method to ADNT Company based on ABC principle,and make a contrast between initial methods and optimized one.Chapter 6,Conclusion.