What Is Current Cost Accounting?

Modern cost accounting is a direct combination of cost accounting and production and operation. It uses specialized management techniques and methods to use currency as the main unit of measurement to predict, decide, plan, control, calculate, and analyze labor costs in the production and operation process. And assessment of a series of value management activities. Cost accounting has the functions of cost forecasting and cost decision making. It is an important sign of modern cost accounting. Modern cost accounting is mainly a management activity, and all functions are played to achieve the goal of cost management.

Modern cost accounting

With the development of social production, especially the promotion of the third scientific and technological revolution, the combination of science and technology and production has become closer and closer, and a large number of new processes and technologies have been used in production activities. The manufacturing environment, market environment, and management environment of the enterprise have undergone profound changes. Traditional cost accounting theories have been unable to meet the requirements of enterprise development. Modern cost accounting was born at this time. ^[1]

1. Carry out cost measurement, prepare cost plan, and provide basic basis for cost control and cost analysis of enterprises. Under market economic conditions, for enterprise management to achieve effective results, scientific and effective management goals must be formulated. In terms of cost management, modern cost accounting emphasizes that the financial department should play its leading role. Together with other functional departments, based on a careful analysis of the past, use historical costs, market surveys, and other relevant information in a scientific way. To predict the cost level, draw up a variety of cost reduction programs for decision-making of the enterprise after comparative analysis. Based on the target cost or cost forecast data, the cost plan, the cost control standard and the main measures to reduce the cost are prepared. In order to implement planned management of costs, establish a responsibility system for cost management, lay the foundation for economic accounting and control of expenses, and achieve the purpose of saving costs and reducing costs. ^[1]

1. Strengthen the study of cost theory and improve the level of cost accounting in China

To establish an accounting theory research method system with Chinese characteristics, theoretical researchers must break through the shackles of traditional accounting concepts, emancipate the mind, and have the courage to open up new research fields and research topics. They should be in-depth with the spirit of innovation, pragmatic attitude, and rigorous style Investigate and research, work closely with actual workers, find problems, and solve problems: extensively carry out case studies and extract successful experiences from a theoretical level. At the same time, theoretical research should be devoted to transforming theoretical research results into productivity for practical problems in cost accounting in China. On this basis, pay attention to practical results, establish an assessment, evaluation and incentive mechanism for the research results of cost accounting theory, and give full play to the guiding role of cost theory research in cost accounting practice.

2. Promote the computerization of cost accounting

The use of computer technology-centric information management methods has become an inevitable development trend of modern cost accounting. The cost accounting of enterprises uses electronic computers as a means to greatly accelerate the speed of information feedback and enhance business processing capabilities. For timely and accurate cost forecasting, decision-making and accounting, effective cost control, comprehensive evaluation and analysis of costs, both There's important meaning. Practice has proved that the realization of computerized cost accounting is an urgent task and a technical prerequisite for implementing a new cost accounting method. However, the current accounting computerization application still has the following problems: First, it simply stays at the stage of imitation instead of manual accounting, which can only reflect after the fact, and cannot make scientific decisions, predictions and in-event control. The first is in the enterprise management information system. Purchasing, marketing, personnel, accounting and other subsystems are separated from each other, and the entire enterprise management information system has not yet formed an organic connection. The second is that accounting information systems generally provide only financial accounting information, which cannot fully reflect the needs of cost accounting and management accounting. Therefore, in order to promote the in-depth development of computerized accounting, we must accelerate the transition from computerized accounting to management, integrate the accounting information system into the entire management information system of the enterprise, and apply cost-based accounting for management and cost management. Accounting provides reliable technical support.

3. Impact on the original manufacturing cost method

The production cost method was the product of the development of capitalist companies in the early 20th century. At that time, materials and personnel costs were the main components of product costs. Indirect costs, research and development costs, and later maintenance service costs were not important, and it was difficult to measure and directly account for product costs. However, with the development of social productivity, the increase in the knowledge content of product costs has led to major changes in the original cost structure of enterprises, which are concentrated in the increasing proportion of research and development costs and service costs or backup costs. In addition, the scope of modern cost management is not only focused on the manufacturing process, but on the entire production and management process, especially the product development, research and design process. Therefore, we believe that the cost items should include research and development expenses and sales expenses, as well as post-service costs, so as to facilitate the effective cost management of the enterprise.

(1) The cost item should include the service cost after the production of the product is completed. After the production of the company's products, the cost is an objective fact, but it does not mean that the cost management has ended, because the company's products have not yet been sold and have not been recognized by the society. The production costs incurred by the company's products have not been compensated. If an enterprise wants to get more compensation and maximize the value of the enterprise, it must continue to consider marketable products in terms of product quality and function, and consider how to start the market, expand the market, and expand the market. This will happen after the product is completed. Later service costs or backup costs. The occurrence of such costs is also indispensable for the company's profit. For example, after-sales service, delivery services, and advertising costs are generated. These costs are indispensable for modern enterprises in market competition. What is missing is that for enterprise management, these cost information have strong decision-making relevance. For example, today's companies pay great attention to the promotion of famous and premium products and the launch of branded products. Advertising costs have been increasing year by year. The price of products has also increased with the expenditure of advertising costs, but the increase in prices may not bring businesses More profits, so it is necessary to strengthen the management of advertising costs, increase the rate of return on advertising costs, and strengthen the management of projects that are listed as costs.

(2) The cost of product research and development should be included in the cost item. People have gradually realized that the manufacturing cost of a product is determined to a certain extent by the design stage of the product. Therefore, reducing the cost of an enterprise should begin with the product design cost. Correctly speaking, the cost of a product should be considered during the development, research, and design stages; otherwise, the design cost is too high, which will inevitably lead to the phenomenon that the cost cannot be reduced in the production process. With the development of information technology and the advent of the knowledge economy, high-tech science and technology have been widely used in product production, and the traditional cost accounting method does not calculate the cost of product research and development, which inevitably makes the cost information reflect untrue. Therefore, whether it is a new technology developed by its own company or an externally purchased patent, it should be included in the product cost according to its evaluation price, market fair price or actual purchase price, based on the product's life cycle allocation.

(I) Determining the current costs of various assets The determination of current costs is the basis and premise of modern cost accounting. It is the cash to be paid to obtain assets that have the same or equivalent production capacity as existing assets under current market conditions. Or cash equivalents. The current cost data of corporate assets mainly comes from its current market prices, supplier sales quotes based on fair transactions, and reproduction costs. ^[1]

Modern cost accounting uses the current cost as the measurement attribute and the nominal currency as the measurement unit. Because it is fundamentally different from general purchasing power accounting in terms of valuation basis and basic structure, it is considered to be a real price change accounting. In the daily accounting treatment, there is also its own unique accounting method. ^[1]

Due to the application of electronic technology in the industry, a highly computerized and highly automated production has been formed, and a new manufacturing environment has been formed. In the new manufacturing environment, enterprises must have modern cost accounting technology that is compatible with it. The development of modern cost accounting has adapted to the needs of business management and promoted economic development. The specific analysis of the application of modern cost accounting in enterprise management is made from the following aspects. ^[3]

1. Application in senior management of enterprises

Modern cost accounting is to effectively serve the enterprise's practice management, provide timely diversified information and corresponding analysis and research materials in a timely manner, and serve as a "catalyst" for the senior leaders of the company to think strategically in the right direction. So that they can take a long-term perspective on the environment and conditions inside and outside the company, to understand the strengths and weaknesses of competitors and future combat readiness trends; and to understand the current needs of current and potential customers and their future development prospects And then gain insight into the opportunities and challenges that may be captured in the longer term.

2. Application in enterprise cost management

As the quality embodiment of enterprise management, cost level shows that cost management is an indispensable part of enterprise management. How to properly introduce and apply strategic cost accounting theory and methods to strategic cost accounting management is an important step for Chinese enterprises to improve their operation and management level. . Cost accounting considers that purchasing includes not only purchasing costs in the general sense, but also costs associated with low quality, low reliability, and unsatisfactory transportation conditions. Therefore, in the management of costs, not only the purchase price should be considered, but also the quality, reliability, and timeliness of delivery of purchased raw materials should be taken into account.The cost determined in this way is more comprehensive and provides Data is more practical and reliable. After the collection and processing of procurement costs, the relationship between each operation and cost in the procurement chain in the value chain should also be analyzed. Based on the operation, the procurement costs should be allocated to the product costs that it should bear. This makes the product cost correlation much stronger.

3. Application in enterprise market positioning management

In the cost accounting system, first consider the positioning of products in the market, one is the positioning of product types; the other is the positioning of products in the same industry. In the production stage, the successful implementation of strategic cost accounting system needs to be based on high-quality economic information, and pay attention to collecting some information: such as product quantity, quality, consumption, cost and production organization, financial information, sales information. After obtaining the information, according to the internal limited resources of the enterprise and the external market environment, the alternatives are determined for the decision objectives under several different conditions. Combined with qualitative analysis of managers with rich knowledge and experience, appropriate evaluations and choices are made from various alternatives to determine the best plan. At the same time, the implementation of strategic cost accounting system also promoted the process of enterprise informatization. The strategic cost accounting system analyzes the feedback information to form a crisscross network between the various departments of the entire enterprise, clarify the responsibilities of each department, avoid unnecessary costs, and avoid unnecessary production links.

4. Application in enterprise after-sales service management

The purpose of implementing modern cost accounting is to reduce the total cost and optimize the management of costs. It should be improved mainly from the aspects of suitable quality control, outlet layout control and perfect after-sales service.

First of all, the appropriate level of product quality control is mainly to correctly handle the relationship between quality and cost, and strive to achieve the best combination of appropriate quality and lower cost. To this end, we should focus on the control of quality costs; second, we must focus on strengthening quality economic analysis from the perspective of strategic cost accounting. Conduct regular surveys to households, and then feed the information back to the cost accounting department for analysis. In this way, the cost quality can be optimized and the hidden costs can be effectively reduced. The cost accounting system at the sales stage can be further realized through the rationalization of outlet configuration and layout. Finally, improving after-sales service of after-sales products has a significant role in stabilizing and attracting customers, establishing a good image, and promoting sales.