An Empirical Analysis of Activity Based Costing in Chinese Enterprises
Journal of Finance and Accounting
Volume 4, Issue 5, September 2016, Pages: 301-309
Received: Sep. 19, 2016; Published: Sep. 19, 2016
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Authors
Huijuan Lin, Beijing Institute of Technology Zhuhai Campus, Zhuhai, China
Yanglin Li, Beijing Institute of Technology Zhuhai Campus, Zhuhai, China
Wanxin Li, Beijing Institute of Technology Zhuhai Campus, Zhuhai, China
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Abstract
In recent years, with the rapid development of China's economy, the progress of productive forces and economic system led to the shift from a seller's market to a buyer's market, the single species mass production mode to the varieties and labor intensive industry to technology intensive industry. Therefore, production based on sales have become the norm, once high profits caused capital investment along with the releasing capacity and increasing production, the competition between the enterprises gradually bases on the cost. Therefore, with the needs of business development, a new cost accounting system - activity based costing came into being. Activity based costing is based on the cost driver, which could allocate the indirect manufacturing costs more reasonable, then achieve the purpose of further cost control. In many western developed countries, activity based costing has been used in the enterprise. Although its application scope in Chinese enterprise is not very extensive, it has already got certain attention of many enterprises in China.
Keywords
Activity Based Costing, Cost Driver, Indirect Manufacturing Cost
To cite this article
Huijuan Lin, Yanglin Li, Wanxin Li, An Empirical Analysis of Activity Based Costing in Chinese Enterprises, Journal of Finance and Accounting. Vol. 4, No. 5, 2016, pp. 301-309. doi: 10.11648/j.jfa.20160405.17
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