Abstract
With the rapid development of Chinese economic, enterprise cost control and management of enterprise face enormous challenges. Traditional cost control and management are almost dominated by after-costing in mainland. Prior-cost estimation is generally based on statistical result of historical cost data. The theories of cost accounting and Enterprise Resource Planning are uses for reference. The prior-estimation of process-based cost of railway transportation equipments is researched and practiced from the product manufacturing process. In the view of refined management of costs, the constitution of the process cost is analyzed in manufacturing process of railway transportation equipments, and it is presented that a mathematical model of cost estimation based on working procedure. Enterprise could know the process cost of a product before it is manufactured by it. That provides a reliable basis for controlling and managing the enterprises prosecution cost. Then the process cost estimation based on working procedure of a gear is selected as an example, which is one of the gears in starting transmission of the railway locomotive diesel engine.
Highlights
Cost estimation is an important means for strengthening enterprise cost management
In the view of refined management of costs, the constitution of the process cost is analyzed in manufacturing process of railway transportation equipments, and it is presented that a mathematical model of cost estimation based on working procedure
The process cost estimation based on working procedure is playing an increasingly important role in Chinese modern railway transportation equipments manufacturing industry, the reason why it is called estimation is because the basic data of it are estimated
Summary
Cost estimation is an important means for strengthening enterprise cost management. The reasonableness and accuracy of estimation is the key in determining their profitability, competitiveness and sustainable development. Along with the rapid development of Chinese railway transportation equipments manufacturing industry, cost estimation has become increasingly important role. We submit the method of the process cost estimation based on working procedure for conquering the shortcomings and limitations of cost accounting, Activity-Based Costing (ABC) and Enterprise Resource Planning (ERP) cost checking, which based on the cost checking of Chinese traditional railway transportation equipments manufacturing industry. This method can estimate the production costs in advance and guide the product manufacture cost control and management in point of engineering view. The relative theory and method has important reference to the cost calculation in the process of other product life cycle
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