| Summary: | 碩士 === 國立中興大學 === 高階經理人碩士在職專班 === 97 === At present, the information technology has made the world a place with no borders, and as a result of the scientific and technological progress, the production has also been quite different than before. The traditional models of cost structures are too simple with direct materials and direct labor accounting for a major proportion of total cost, while manufacturing indirect cost(overhead) costs just take a small proportion. However,indirect cost portion increasing rapidly in today’s manufacturer environment.The cost allocation at only one stage and use only one driver is likely to result in cost distortions. Such cost analysis has been not able to get adapted into the competitive environment today.
In order to enhance competitiveness, challenge in an era of low-profit margins, a company must be careful in controlling the cost, adequately understand its own cost structure and adopt a more reasonable approach of cost analysis. Activity-based Costing(ABC) is a costing model that first assigns costs to the activities that are the real cause of the overhead. It then assigns the cost of those activities only to the products that are actually demanding the activities. Such costing is able to provide more accurate costs for decision-making purposes by remedying the distortions and subsidies among products resulted from the traditional approach in which the products are charged for resources that they did not use.
The study aims to examine how the case subject, in accordance with Activity-based Costing(ABC), identifies activities in the organization, resources of each activity, calculate drivers’ allocation rate and assigns the cost to each unit or department according to the actual consumption.Use ABC system to calculate a real order’s cost to compare with the traditional costing system is also made. Finally, the study provides data summaries that could be used by the companies in the implementation of Activity-based Costing and by high level managers in decision making processes.
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