Research on Application of Activity-based Costing in Enterprise Product Pricing

The primary purpose of enterprises is to make profits. Being the monetary value of goods, price has close correlation with corporate profits. The product cost plays an important foundation role in pricing. With the high development of new technology, it is absolute that traditional cost accounting methods can not meet the automotive industry's need for accurate cost information. Activity Based Costing (ABC), which focuses on activity and its cost driver, can determine the cost of the product to arrive at a reasonable price much more accurately. The case in the article shows that the Activity Based Costing provides accurate cost information for enterprise and can be scientific basis in pricing.