Competitive Price Strategy with Activity-Based Costing - Case Study of Bicycle Part Company

The paper uses Activity-Based Costing (ABC) approach with two stages to allocate and calculate the manufacturing cost which is based on resources expired of process activities. By comparing the cost information between VBC and ABC approach, the research findings indicate that current VBC approach distorts cost structure because of single cost drive had been chosen, therefore, cross-subsidization among manufacturing cost structure among variant product. Secondly, ABC approach provides more accurate cost information that will help to set the competitive price strategy of the product that is great contribution to increase enterprise's profitability and competitive power. The paper look forwards to implement Activity-Based Costing approach which the product are variant and manufacturing process are complicate of the enterprise and industry.