| dc.description.abstract | The pharmaceutical industry in Taiwan has undergone rapid changes in the past decade due to the continuously renewal adjustments, policies, and regulations for a better and complete health insurance system, such as separation of prescribing and dispensing, reasonable load for outpatient service, and global budget. Furthermore, after entering WTO, in order to meet the high international pharmaceuticals standards, the government has set a new national quality standard, cGMP, which also leads to escalating production costs throughout the industry. However, as supply of pharmaceutical products outstripped demand, producers have to lower the prices to compete. Under these circumstances, deriving accurate cost estimation, improving production capability, reducing low-added-value products and effectively pin-pointing the most valuable customers, all play important roles to survival in this highly competitive environment.
Activity-Based Costing system is a cost management approach, providing information in three aspects that cannot be achieved with traditional costing system. The system also provides information for continual improvements and performance evaluation, which effectively help basic activity management. This case study attempts to demonstrate how the Activity-Based Costing system can be applied, and its advantages in pharmaceutical industry.
By means of case study, the following research topics are to be addressed:
1.Evaluation of the effectiveness of the existing cost system of the target firm.
2.Design of a new costing process based on the Activity-Based Costing approach.
3.Comparison between the traditional costing and ABC system.
4.Recommendations for cost improvements.
The main finings are as followings:
1.ABC system outshines the traditional costing system by providing more accurate costing information, which effectively avoids inappropriate decisions.
2.Computing costs according to resources and specific activities, ABC system alternates the estimated profitability of target products, keeping off misdirection made by the traditional costing system.
3.ABC system clarifies production costs of all activities, which helps reestablish prices and market strategies.
4.Repositioned product and customer valuation leads to an improved production process and service base line. | en_US |