On the challenges of cost accounting

Paper Keywords: manufacturing environment, management theory, cost accounting

Abstract: This article discusses the cost accounting is undergoing unprecedented changes, detailed analysis of the current cost of the new manufacturing environment accounting for the impact of innovation management theory and methods of cost accounting impact.



Currently, the cost accounting is undergoing unprecedented change, this change is mainly reflected in two aspects: First, the cost accounting techniques and methods constantly updated, the second is the application of cost accounting expanding the article on the impact of the development trend of cost accounting do the following analysis and countermeasures.


A new manufacturing environment, the impact of cost accounting

Full advantage of the new manufacturing environment, the latest achievements of modern science and technology, the performance of automation and Computerization of two features the new manufacturing environment including:
1.1 Flexible Manufacturing Systems: is the use of robotics and Computer-controlled material handling systems, combined with a variety of independent tools for production process control Computer, it is good for flexible manufacturing process of its biggest advantage is engaged in product variety of production, address the variety of products, refined needs.

1.2 Computer-aided design and manufacturing systems: Computer-aided system would improve the computer's functions, and for manufacturers to provide a broader space for development, the use of computer-aided system that can reduce labor costs, save time and improve efficiency.

1.3 Manufacturing Resource Planning: is used in computer manufacturing management information system is currently a popular material requirements planning of its predecessor.

1.4 computer integrated manufacturing system: refers to the computer as the core, combined with the all new IT systems, automated manufacturing process to form, even to the extent of unmanned factories.

Once the automation business, the productivity will be improved significantly, not only will reduce the cost and quality will improve. Accordingly, the company must also be followed into the structure, staff skills and should be followed to improve the quality of its management methods are be automated adjustment.

New manufacturing environment, companies face the impact of the traditional cost accounting techniques and methods to be improved, if not, will cause the following consequences:
a. incorrect calculation of product cost in the new manufacturing environment, robots and computer-aided system has been replaced in some work, labor, labor costs rose from traditional manufacturing environment, 20% -40% to now less than 5% . but the rapid increase in manufacturing costs and diversify their assessed if only artificial-hour standard has been difficult to accurately reflect the cost of various products.

b. traditional cost accounting, actual costs can be compared with the standard cost, while in the new manufacturing environment, this control system will produce anti-functional behavior, for example, to obtain a favorable difference in efficiency that could cause one-sided pursuit of mass production, resulting in an increase in inventories, in addition, to obtain a favorable price differential, the purchasing department may buy low-quality raw materials, or bulk purchase, resulting in quality problems or material inventory, in order to obtain a favorable difference in the number of raw materials, producers may the poor quality of the product into the next process, so that further expansion of waste loss and so on.

Traditional cost accounting for manufacturing environments not suited to the new situation, the United States, the accounting academics have suggested activity-based costing (ABC method, currently in the United States, Japan, Western Europe and other countries of the enterprise, especially in those highly competitive and low labor costs high-tech enterprise, has been widely applied in the operating cost method, based on and the development of activity-based management (ABM, namely the use of operating cost information to help managers identify non-value-added and resource-consuming operation. ABC Act to provide cost information, managers can promote re-design the entire value chain of operational activities, in order to save company resources.

At present most of the enterprises in China is still a labor-intensive enterprises, does not have the conditions for the implementation of the ABC method, but the ABC method of allocation of manufacturing costs in China's reform is very instructive.

2 methods of innovation management theory and the impact of cost accounting

With the increasingly competitive market, new technologies, new techniques are emerging, new management theories and methods emerging, cost-accounting system that affect mainly the following:
2.1 in-time (JIT
In-time is purchased only when needed in the production of parts, or products produced when customers need it, so inventories kept to a minimum in the case of very low inventory levels, simplify inventory valuation accounting personnel can be used to push down cost method, ie, completed or when the product sold, down too far to calculate the products, finished products and other production costs. in the use of JT's business, products made from raw material receipt to the time spent will be greatly reduced, and ending inventory becomes very small, making the cost of the traditional batch method or cost method step by step detailed records of various types of inventory (raw materials, finished product and the need to be questioned so that the cost - effective, a detailed inventory of a small amount of the retrospective, some no doubt more harm than good, and for efforts to overcome these problems and force push down the cost method came into being. Links to free download http://www.hi138.com 2.2 Total Quality Management (TQM
TQM has evolved into a strategic competitive weapon, one from the customer's needs and expectations-driven, continuous improvement of product quality management philosophy. TQM company's goal is to pursue all aspects of the production of the product, "zero defect" and ultimately by the customer to define quality. TQM can be produced to promote the quality of accounting due to improved quality of the resulting benefits are difficult to measure, quality, accounting quality has remained at the cost of the recognition, measurement and reporting on Quality costs from the cost of prevention, inspection costs, internal failure costs, external failure costs, external quality assurance costs five classes. In addition, in the case of TQM, the accounting staff performance metrics including product reliability, timeliness of service, contributing to the management efforts to improve the quality of non-monetary indicators.

2.3 Strategic Management
The so-called Strategic Management is focused on the development of enterprises have long-term, fundamental issues affecting the decision-making and policy formulation in order to market to gain a competitive advantage to ensure the effective completion of the company's goals. Like "people-oriented" personnel policies, the "difference oriented "or" cost leadership "in the market positioning strategy, and the use of total quality management of product quality strategy, etc. Strategic Management thinking to the cost accounting system is mainly reflected in the proposed strategic cost management. strategic cost management is an enterprise in the production of homogeneous products with competitors, the cost is lower than our competitors, so that customers can lower costs, achieve the same functionality. strategic cost management generally include value chain analysis, market positioning and cost driver analysis of three aspects.

2.4 Benchmarking and continuous improvement
Management of the new trend is the combination of benchmarking and continuous improvement, the so-called benchmarks, the company is the best external or internal performance standards to measure their production activities, continuous improvement means that management is not a one-time benchmarking, but rather an ongoing , and continues to advance the process. Toyota is to implement the benchmarking and continuous improvement of the typical, benchmarking and continuous improvement known as the "never end" of the game, managers and employees are not satisfied with the level of a particular work but to seek continuous improvement. enterprises using this method found that previously seemed unattainable goal now has reached the benchmark cost management and continuous improvement of the impact of the accounting system is the lowest cost to homogeneous products as a benchmark, and recognize that cost is an endless process, companies can always find ways to make this year's costs and expenses below prior year.

2.5 Theory of Constraints
According to theory of constraints, each company has at least a bottleneck restricting the development of it, otherwise, no matter what the company set a goal can be realized. The theory of constraints to business as a series of chain-linked process, if the weak The link has been strengthened at, then the whole chain will be strengthened, on the contrary, if the strengthening of links at the other, the entire chain will not be strengthened. Theory of constraints on the effect of cost accounting systems, management and accounting staff in some cases, it can no longer emphasized reducing costs and expenses, there must be contrarian, to the weak links in the chain enterprises, in turn, increase in volume, "In order to save money and spend money." If the company's bottleneck is to be resolved update the device, then the introduction of new equipment could lead to a greater spending, but during the next device, because devices improve efficiency and increase output, reduce maintenance costs of equipment the overall efficiency may offset the expenses And more than so, on the whole, benefits will increase, which is the "cost - benefit" principle is another interpretation.

2.6 Management by objectives
Western developed countries, the target management is an effective enterprise management, in the 1980s into China. Management by objectives, ten companies in a given period should be required to determine the overall goal, such as the total profits, capital profit margins, etc., and according to guide, organize, mobilize staff to complete the total business goals. around this overall objective, corporate departments, as well as various aspects of each member should develop their own goals, such as sales targets, cost objectives, technical goals, and develop measures to achieve its objectives, to ensure the completion of the overall goal. target-oriented management can improve the management of the initiative and enthusiasm to overcome the blindness, and improve enterprise management level management by objectives of cost accounting the impact of the system is the target cost of the development, decomposition, control and analysis. China's Handan Iron and Steel Group's "simulated market accounting, the implementation of cost-veto 'experience in the military's target cost is the cost from the target cost of the development to the management, China has initially form a relatively complete system. Links to free download http://www.hi138.com