A Study On Activity-Based Cost(ABC) Application In P Corporation

In the era of competitive environment,cost accounting is taking a very important role and gets attentions by the enterprises.At the same time,the technology is developed rapidly,the cost structure is changing with more overhand cost than direct labor cost.The production environment requires multiple varieties and small batches as well,which lead to highly mixes production in the enterprises.The tradition cost accounting gets challenges and Activity-based cost shows its signification by reviewing the activities and providing the accurate product cost.Some big enterprises implemented ABC,but ABC is not broadly used as its implementation cost is high and need enterprises management and operation system support.This thesis starts at the introduction on the background,significance,researched methods,then studies the lliterature on standard cost and activity-based cost.The P corporate profile,company strategy,operation system and current cost accounting are descripted,and the product cost distortion issue is raised in case description.The analysis of product cost distortion is studied in detail,and applicability and feasibility of ABC in P corporation are argued.After that,the thesis demonstrates the simulation result of ABC and its ROI,then provides the conclusions and suggestions at the end.This research argues that ABC can help the enterprises like P corporation on the product cost accuracy and proves it with ROI.It can improve the competitiveness of the quote price and serve P corporation subcontracting and automation strategies.It is hoped that this research can help the similar enterprises as P corporation on ABC implementation,specially under SAP ERP system.