Indeed, the introduction of Activity Based Costing information / books made an example introduced at the time, definitely there will be a test case, the operating cost method of product cost and lower the cost of traditional cost a huge difference, so there is the cost of distorting the original cost accounting results need improvement. Enterprises operating cost method if the goal is to find the cost of distortion, which is relatively narrow.
Need to know two things right here:
1, the operating cost method of calculation is not natural is right, not as the result of the traditional cost difference between the cost of large traditional method say that there are distortions. Can say is: the result of costing more easily explained, people are more receptive.
2, found that the cost of distorting the implementation of activity-based costing can only be basic objectives. Distortion can only be found once, after the discovery of using activity-based costing would be no more distorted. Costing a lot management value, this is the implementation of the fundamental objectives of costing.
We are in the implementation of the project is reflected in the value of management include: the costs of production outside the accounting cycle, thus helping to control these costs, such as logistics costs (the cost of logistics customers bigger than the cost of production, and before only as a cost control); Tongguo logistics during the production capacity loss be measured, supporting decision-making on price, capacity and volatile fluctuations in the cost of also large, must rule out the production fluctuations in the price to clear the bottom line. Operating cost through the implementation of the responsibility of all sectors of the business division of costs, contribute to assessment. Through the decomposition of cost drivers to help out a more reasonable cost control standards, will help strengthen control. In the correct accounting basis, the value of their products and customer value analysis. (Product value analysis and customer value analysis is the desire of many financial manager for years, or a dream)
Of course, the cost more accurately, of itself is a powerful business decision support. If a company's sales staff does not believe the financial sector to provide cost information, we put ourselves think about what would feel! If the existing cost information to tell you each have to lose money to sell a ton, and you do not believe the cost of information, you look like feeling. If you order a small order requirements, you need to switch their production, that will increase costs, but do not know how much more money, what would you feel, these are costing value. Costing the implementation must be guided by these values, not to operating cost theory as a guide.