Activity-based costing of traditional costing method

Activity-based costing (ABC) refers to a cost calculation method that takes activities as the accounting object, confirms and measures the workload through cost drivers, and then allocates indirect expenses according to the workload. Under activity-based costing, activity-based costing can be divided into four levels of product unit cost. That is, the direct costs related to the production of unit products, including raw materials, direct labor, etc. The activity cost at this level is directly proportional to the output. ② Production batch cost. That is, the resource consumption related to production batches and packaging batches, including production preparation costs, cleaning costs, quality costs, etc. The activity cost at this level depends on the number of production batches. ③ Product maintenance cost. That is, the resource consumption related to the product type, including the cost of obtaining the production license and packaging design of a certain product. The activity cost at this level depends on the scope and complexity of the product. ④ Factory-level cost. That is, the resource consumption related to maintaining the production capacity of the operation, including depreciation, safety inspection fees, insurance, etc. Activity-based cost at this level depends on the size and structure of the organization.

(1) The basic idea of activity-based cost management.

Enterprises are a series of closely related activities, and their operation is to finally meet the needs of customers and maximize the reward value of investors. Enterprises consume activities while producing goods or providing services, and activities consume resources, and resource consumption is also a process of value accumulation. Finally, goods or services are not only a collection of all activities, but also a collection of all values. Activity chain is also a value chain. Activity-based costing includes two stages of manufacturing cost allocation process; In the first stage, the manufacturing costs related to production or service are collected into the interoperability center to form activity costs; In the second stage, the cost collected by activity-based costing library is allocated to products or services through activity drivers, and finally the output cost is obtained.

(2) The cost calculation procedure of activity-based costing.

① Confirm and measure the cost of consuming enterprise resources. Resource costs that can be intuitively determined as specific products or services are classified as direct costs, directly included in the cost of specific products or services, and the rest are classified as activity-based costs.

(2) Identify and measure the operations that consume resources. Operation refers to related production, operation and management activities that consume enterprise resources in order to provide services or products. Such as order processing, product design, staff training, material handling, machine debugging, quality inspection, packaging, sales, comprehensive management, etc.

③ Measure the activity-based cost. According to the different resource consumption methods, the indirect resource cost is allocated to related activities, and the cost of each activity, that is, the activity cost, is calculated.

④ Select the cost driver, that is, select the factors that drive the cost. An activity often has more than one cost driver. The cost drivers that are most relevant to actual resources and easy to quantify should be selected as the basis for allocating activity costs and calculating product costs, such as labor hours, machine hours, machine preparation times, product batch number, material receiving times, material handling capacity, order number, inspection times and process change times.

⑤ Collect the cost library. That is, the related activity costs of the same cost driver are merged into the "homogeneous cost library", such as power and maintenance costs can be classified into one cost library.

⑥ Activity-based cost allocation. Its calculation formula is:

Allocation cost = activity-based cost (library) allocation rate \ the number of cost drivers consumed by products.

⑦ Calculate the product cost. Combine and summarize the distribution cost of each activity cost (library) and direct cost (direct labor and direct materials) of a product to calculate the total cost of the product, and then compare the total cost with the product quantity to calculate the unit cost of the product.