Research On Improvement Of Cost Management Of LY Garment Co.Ltd Based On Activity-Based Costing

After years of development,China's garment industry has saturated,competition is becoming increasingly fierce,and apparel companies are facing increasingly severe challenges.Apparel companies must reduce expenditures scientifically and pay more attention to cost management.The popularization of mechanical automation and the rising cost of research and sales has led to a sharp decline in the proportion of the direct cost of the product,while the proportion of the indirect cost is rising sharply.The traditional cost calculation can no longer meet the needs of cost calculation and management of modern apparel companies.Cost management methods that are more in line with the current market environment should be introduced into company.LY Garment Co.Ltd is a garment manufacturing company.The company uses the batch method to calculate the cost of the product,and distributes the manufacturing cost through the output to each product.The cost management level in the company is rather low,the cost calculation is inaccurate,and the cost control is not connected with the real condition of the company.Based on existing research,and combines the operational chain,value chain,cost driver theory,this article explores the application of ABC in LY Garment Co.Ltd.According to the principle of ABC,this article decomposes the company's operational process,and designs the ABC system for LY Garment Co.Ltd.Based on the current data,compares the cost under traditional costing with the cost under ABC,and analyzes what effect would result under the implement of ABC of LY Garment Co.Ltd,including cost control,managerial decision-making and performance evaluation.Finally,demonstrates the supporting measures in order to imply ABC method successfully,including improve the cost control awareness of staff,establish a supporting management system,and strengthen professional personnel training.This paper conducts a case study on the cost management of LY Garment Co.Ltd,introduces the ABC method into the company,improves the cost management level of the case company,and provides reference for the garment enterprise.It has important theoretical and practical significance for the improvement of cost management level in China's garment industry.