| dc.description.abstract | The precision machining industry in Taiwan holds a significant position globally, with high precision as a key technological advantage. However, in the face of intensifying competition, a complex market environment, and the challenge of lower manufacturing costs in China, coupled with global inflation driving up prices, enhancing competitiveness and productivity to reduce manufacturing costs has become critical for Taiwan’s precision machining industry to achieve sustainable operations and profitability.
This study examines a small-to-medium-sized manufacturing enterprise to explore the differences between the current cost system and Activity-Based Costing (ABC). By integrating the two methods, the study aims to optimize the case company′s production processes and, from a financial accounting perspective, identify more effective production methods and cost allocation strategies to reduce waste and enhance company value.
The main products of the case company are precision-machined molds, mold cores, bushings, templates, and parts. Due to the customized nature of these products, they rely on the skills and experience of personnel operating precision machinery across various workstations. Effective management between these workstations is essential to maximize efficiency and reduce abnormal cost fluctuations, a primary challenge for the company.
In conclusion, this study finds that introducing Activity-Based Costing (ABC) to supplement the current cost system enables more precise cost allocation and effectively incorporates sales and administrative expenses into the cost basis, reflecting the actual product cost. Overall, the study’s conclusions and recommendations assist the case company in finding more effective cost control and management strategies to achieve sustainable operations and stable profitability in a highly competitive market. | en_US |