Activity-based costing (ABC) is a new cost accounting method, which aims to make up for the shortcomings of traditional cost management accounting and strive to provide timely, accurate and relevant cost information. Since the mid-1980s, in order to meet the requirements of new technological revolution and just-in-time system, activity-based costing has attracted the attention of enterprises in developed countries, among which manufacturing is the most widely used. Since the introduction of activity-based costing in China in the early 1990s, theoretical and practical circles have begun to explore its application in enterprises in China. In recent ten years, the research and application of activity-based costing in China has also made great progress. However, can this effective cost management accounting method be widely implemented in China enterprises? The author believes that the time is not yet ripe. This paper compares and analyzes the background of activity-based costing and the main environmental factors faced by Chinese enterprises.
First of all, analyze the activity-based costing from the background.
1, technical background. Since 1970s, with the rapid development of science and technology, great changes have taken place in the business environment. Many managers realize that the old business model has not adapted to the trend of the times and must carry out major reforms in enterprise management and transaction processing. With the application of high technology in the production field in western countries, the management authorities require product design and manufacturing engineers to adopt computer-aided design, computer-aided manufacturing and even computer-integrated manufacturing systems in improving labor productivity, reducing costs and improving product quality. The establishment of computerized design and manufacturing system has brought about great changes in management concept and technology, so just-in-time production system (JIT) came into being. JIT requires enterprises to start with customers' needs, produce and sell on the same day, thus eliminating inventory and various forms of waste. The implementation of JIT has strongly impacted the traditional cost calculation and cost management methods, and directly led to the formation and development of activity-based costing.
2. Social background. The wide application of high-tech in the production field has greatly improved labor productivity and promoted social and economic development. With the development of social economy, people's requirements for quality of life are getting higher and higher. From the perspective of consumption, people are increasingly pursuing personalized consumption, which requires enterprises to improve their adaptability and provide consumers with more diversified, personalized and ever-changing products and services in time, otherwise they will be eliminated in the market competition. Under the pressure of market competition, enterprises have to abandon the traditional mass production mode and adopt flexible manufacturing system (FMS) which can quickly respond to customers' diverse needs. Under the control of computer, FMS organically combines carefully selected equipment, robots and raw material processing systems to work synchronously and harmoniously. The change of production mode has greatly changed the social environment in which traditional cost management accounting methods exist. Therefore, it is inevitable to change the traditional cost management accounting method.
3. The objective needs of practical circles are the realistic basis for the emergence of activity-based costing. In the western accounting field, there is often a clear gap between theory and practice. In terms of cost calculation methods, accounting professionals engaged in theoretical research admire variable cost method, which is more helpful to product decision-making. Because in the short term, once the existing production capacity of an enterprise is formed, it is difficult to change it in the short term, so the fixed cost used to maintain the existing production capacity is a cost that has nothing to do with short-term business decisions. However, professionals engaged in accounting practice believe that one of the important functions of product cost information is to provide reference for product pricing decision-making, especially for those products that have no ready-made market price for reference. Although the price of products depends largely on the intensity of competition, enterprises can only focus on the most profitable product portfolio on the basis of mastering their own product cost level. Accountants believe that in the new manufacturing environment, the proportion of variable costs is getting smaller and smaller, and collecting and handling fixed costs by period cannot provide a good strategy for controlling the growing fixed costs. Therefore, they are more inclined to allocate the fixed cost to each product and regard the total cost as the long-term manufacturing cost of the product to improve the scientific decision-making. The practical circle's attention to absorption costing is the realistic soil for the production of activity-based costing.
4. Inadaptability of traditional cost calculation methods. In the era of automation and JIT, the direct labor cost of production cost is greatly reduced, while the indirect cost is greatly increased. The traditional cost accounting and management accounting system aims to control the direct labor cost in mass production according to the requirements of standard management, and the distribution of indirect costs is also based on direct labor cost. But more than 70 years ago, the indirect cost was only 50-60% of the direct labor cost. In the era of high automation and JIT, the burden rate of management expenses of most enterprises is 400-500% of direct labor costs. If enterprises still allocate these increasing indirect costs on the basis of reducing direct labor hours, the result is often that the costs of high-yield and low-tech products are overestimated, while the costs of low-yield and high-tech products will be underestimated. As a result, product cost information is seriously inaccurate, which in turn leads to cost control failure and business decision-making mistakes.
The development of computer has laid a solid technical foundation for the application of activity-based costing in practice. The basic idea of activity-based costing was formed as early as the late 1930s and early 1940s, but it really caught people's attention in 1980s. This is because the establishment of a new theory and method requires not only the growth of its own inherent new factors, but also the cooperation of adjacent disciplines and the social environment and technical foundation on which it depends. The main difference between activity-based costing and traditional costing is that it adopts diversified manufacturing cost allocation standards. Without the high development and application of modern electronic computing technology, the huge calculation workload brought by diversified manufacturing cost allocation standards will make it difficult to implement activity-based costing. Since the 1980s, the development and application of electronic computing technology and the development of information processing technology have laid a solid technical foundation for the implementation of Activity-Based Costing (ABC), which has diversified manufacturing cost allocation standards in cost calculation methods.
It is under the influence and restriction of the above environment that activity-based costing came into being and attracted great attention.
Second, from the analysis of the application environment of enterprises in China
1, technical basis. After more than 20 years of reform and opening up, China's scientific and technological level has been rapidly improved, which has enabled the research and application of many high-tech projects in China to enter the world's leading fields. However, on the whole, the level of scientific and technological development in China still lags far behind that in western developed countries. Few enterprises can apply high-tech to production, and the overall equipment level of enterprises is still very backward. According to the investigation of iron and steel, petrochemical, electric power and other industries 15, the gap between the production technology of Chinese enterprises and the advanced level of foreign countries is generally 5 to 10 years, and the gap between key technologies is even greater. Only 1/3' s industrial equipment has advanced technical and economic performance, and nearly 1/5 has been aged, with an overdue rate of nearly 40%. In recent years, with the intensification of market competition, some qualified enterprises have increased their technical input in order to improve their equipment level and increase their market competitiveness. But these enterprises only account for a very small part of the total number of enterprises. Therefore, the implementation of just-in-time system and flexible manufacturing system lacks the corresponding technical foundation at present, and the manufacturing environment suitable for the application of activity-based costing has not yet formed.
2. Social background. At present, China is still in the primary stage of socialism, with a low level of productivity. A large number of labor-intensive industries rely on semi-mechanization and manual operation, and the degree of commercialization, marketization and modernization of production is low. The people's living standard is only well-off, and the demand for market diversification is insufficient. Judging from the current level of science and technology and economic development in China, it is impossible for enterprises to make a big breakthrough in production methods in a short time, and the traditional mass production methods with few varieties still dominate. Therefore, the social environment on which activity-based costing exists has not yet formed, and the internal demand of enterprise management for activity-based costing is not urgent.
3. The present situation of computerized accounting. Since 1970s, computers have been applied to the accounting field in China. At present, China's accounting computerization has developed rapidly. However, compared with foreign countries, it is still at a low level, mainly in the following aspects: less application and unbalanced development; The application level is low, and the systematization of comprehensive management such as procurement, production and cost management has not yet formed; The development level of financial software is low, which basically stays on improving accounting efficiency and reducing the labor intensity of accounting personnel. Therefore, the application of ABC lacks the necessary technical support.
4. Quality of accounting personnel. Although the professional quality of enterprise accountants in China has been greatly improved through years of efforts, there is still a big gap compared with developed countries. There is a shortage of compound talents who not only master accounting professional knowledge, but also understand the corresponding management knowledge and computer application technology. In addition, for a long time, enterprise accountants have been accustomed to using a fixed model and handling accounts in accordance with the relevant provisions of the accounting system, thus lacking professional judgment. Activity-based costing is a complex cost calculation method, which requires not only the technical support of modern means, but also high-quality accountants. Otherwise, it will be difficult to ensure its effective implementation and ideal effect, and even counterproductive.
Three. conclusion
Although activity-based costing has been proved to be an advanced and effective cost management accounting method through the application of western enterprises, the most advanced management method is not necessarily the most suitable and effective for enterprises. The application of any management theory and method will be restricted and influenced by various environmental factors inside and outside the enterprise. If we ignore its application environment and use it blindly, we will get twice the result with half the effort, and the loss will outweigh the gain. Activity-based costing originated in western developed countries, and its environment is very different from that faced by enterprises in China. Therefore, it is neither possible nor necessary for enterprises in China to fully implement ABC.
Although it is too early for ABC to be fully implemented in Chinese enterprises, it can be practiced in some enterprises with high degree of automation and good management level, and then fully implemented when conditions are ripe. Although ABC is restricted and influenced by the environment, it also has a negative impact on the environment. The local application of activity-based costing can obviously promote the improvement of enterprise management level and competitiveness, and will promote the improvement of enterprise automation level in the long run.