The Application of Activity- based Costing in Enterprise Cost Management

Activity-based costing allocates costing by activity,objectively illustrates the relationship between resource consumption and product cost,which keeps the result of cost accounting more accurate.Activity-based costing is an efficient method for the enterprise to manage and control cost and advance competitiveness from inside when facing competitive market environment.Activity-based costing changes standard cost system from making cost standard for products to making value added cost standard for activity,changes founda-tion of differential analysis from quantity to cost motive,coordinates cost management of enterprise inside to conform with practical busi-ness environment with fierce competition by means of internal transfer price,and further plays the role of cost control and enterprise competitiveness.