Activity-based Costing Analysis is translated from ABC costing. Activity-based costing is a method of accounting for the costs incurred in the indirect process of “activity” based on the cost driver theory. The guiding ideology of activity-based costing is: “cost objects consume activities, and activities consume resources”.
Cost drivers are the reasons for cost changes, including resource drivers and activity drivers, which are the basis for resource consumption by activities. The operation can be simply decomposed into a series of processes or activities made by the enterprise for the production of products. The principle of this method is mainly to use activities as the intermediate medium to constitute the consumption of products on activities and activities on resources, and then resources constitute costs through resource drivers and activity drivers. Activity-based costing can provide accurate and complete cost information to better reflect the operation status of enterprises. Activity-based costing mainly focuses on production and operation process, strengthens operation management, pays attention to specific activities and corresponding costs, and strengthens activity-based cost management. Therefore, it is necessary to understand the corresponding work content, cost drivers, etc. for a specific operation or process.
The advantages of activity-based costing: First, the level of enterprise cost management has been improved. Generally, enterprises use the planned cost method, but the planned cost formulated according to the actual indicators of the previous year is not necessarily applicable to the cost production situation of the current year, and the planned cost method cannot accurately reflect the cost of relevant products at the present time, which is not conducive to the timely implementation of enterprise product cost management, and is conducive to the improvement of the quality of cost management and market competitiveness. Second, it is conducive to improving profits. Through activity-based cost management, eliminate non-value-added activities in the production process, further optimize the production process, improve the quality and output of the products produced, and make the product supply system more efficient, so as to further improve the profit space of the enterprise.