Application Of Activity-Based Costing In BE Electric Company

With the rapid development of economy and the continuous innovation of electrical engineering technology,the market competition faced by China's electrical industry is increasingly fierce.In order to adapt to the changes in the market environment,electrical enterprises are gradually changing to an automated production mode.With the improvement of automation level,the cost structure of electrical manufacturing enterprises has changed,and the proportion of manufacturing expenses in the total cost has increased.At present,domestic electrical enterprises basically use the traditional cost method to carry out cost accounting.This method generally selects manual working hours or machine working hours as the allocation standard when allocating manufacturing costs.This single allocation standard will cause the cost information calculated to be inconsistent with the actual cost of the enterprise.This shows that the traditional cost method is no longer applicable to the needs of the reform and development of electrical enterprises.Activity-based costing selects a variety of cost drivers to allocate manufacturing costs.The cost data obtained are more accurate,which fundamentally makes up for the shortcomings of traditional costing in cost accounting and provides more reliable cost information for enterprises.BE Electric Company as a traditional electrical manufacturing enterprise,has also made greater investment in automatic production.Since the traditional cost method is used for cost accounting,there is also the problem of unreasonable distribution of manufacturing costs.Based on the analysis of the actual situation of BE Electric Company,this paper decides to introduce activity-based costing to solve the problems existing in the existing cost accounting methods.Firstly,this paper introduces the basic situation of the enterprise and the problems existing in cost accounting.Through analyzing and demonstrating the applicability of ABC in the company,it is believed that BE Electric Company is suitable to use ABC in cost accounting.This paper selects two complete sets of switch equipment of BE Electric Company as accounting objects,applies activity-based costing to them,and analyzes the application effect of the obtained cost information.It is concluded that using activity-based costing for cost accounting is more beneficial to enterprises.And put forward the following suggestions for the full implementation of activity-based costing in the company: strengthen the training of relevant personnel,and fully publicize the concept of activity-based costing;Improve the level of enterprise informatization and develop and apply ABC software;Part of the trial first,then the full promotion;Strengthen the management of activity-based costs and effectively reduce costs.Based on the full text analysis,the following three conclusions can BE drawn: the application of activity-based costing in BE Electric Company is feasible;The implementation of activity-based costing will help BE Electric Company to improve its market competitiveness.The activity-based costing model of BE Electric Company is operable.Finally,based on the existing research results in this paper,the author puts forward the prospect of the full implementation of ABC in the company.