Experience in Applying Cost Accounting in European Countries

become part of the Board of Directors

Lessons learned from British and American management accounting:

- Enterprises and the state need to attach importance to the international economic system. The international economic system. The international economic system is the private work of each enterprise, but the development of the international economic system is of great interest to the state and economists for improvement and innovation.

- In the application of the KTQT system, it is possible to combine traditional and modern accounting methods in the KTQT cost management to control costs. Starting from building a system of norms and estimates to using traditional cost determination methods such as job-based and process-based cost accounting, to modern methods such as activity-based cost accounting. Depending on the production and business conditions, depending on the production management organization of each enterprise, traditional and modern methods suitable for the enterprise are selected to bring the highest efficiency to the enterprise.

- Regarding the organization of the international accounting model, international accounting is a part of the enterprise's accounting apparatus and the development trend is that international accounting becomes a part of the Board of Directors, which means promoting the role of international accounting in conjunction with the enterprise's management functions.

1.4.2. Experience in applying cost accounting in European countries

France and Germany are two countries with typical European international accounting. International accounting in France and Germany is built in association with financial accounting, has a close relationship with general accounting policy and is subject to the legal intervention guidance of the state with the main goal of providing information for internal control. International accounting in France and Germany also develops to ensure the provision of information for cost and revenue control. International accounting in France and Germany attaches importance to the nature of cost factors and builds and analyzes the responsibility reporting system and departmental reporting system to manage costs. The international accounting system in France and Germany often focuses on building a budgeting and norming system, analyzing costs, creating and analyzing departmental reporting systems and responsibility centers, analyzing break-even points, and analyzing financial statements. Regarding the organization of the international accounting apparatus, international accounting in European countries is built as a part of accounting and the main purpose is to control the operating process.

production and business

Lessons learned from cost accounting in European countries:

- International accounting is closely linked with financial accounting and is a part of accounting.

International economics is subject to state intervention through law.

- The purpose of management accounting is to control costs, revenue and profits, so accounting work mainly focuses on making estimates, norms, responsibility accounting and preparing departmental reports,,,,

- International accounting is organized as a part of corporate accounting.

1.4.3. Experience in applying cost accounting in Asian countries

Experience in applying cost accounting in Asian countries is studied through studying the cost accounting systems of two typical Asian countries, Japan and China.

Experience in applying Japanese cost accounting

Japan was a defeated country in World War II, but the Japanese economy has strongly recovered, with a significant contribution from cost accounting. Japan's cost accounting is often organized separately from financial accounting. Japanese enterprises highly appreciate the role of cost accounting in cost management, cost establishment and control. Therefore, costs are classified according to different criteria, cost establishment and cost estimation are of great interest to Japanese enterprises. In Japan, the cost accounting system is developed and widely applied in enterprises with the purpose of controlling costs and cutting costs. In Japan, enterprises still apply traditional cost determination methods and mainly determine by total cost, the activity-based cost method has not been applied by enterprises. In particular, Japanese enterprises are very interested in using the target cost method. The target costing method is applied in combination with production management methods such as the lean manufacturing model (JIT), the theory of constraints (TOC), the Kaizen cost method or the Six Sigma process improvement method... The application of the target costing method with production management methods has made a great contribution to cost control and cost reduction for

Japanese company

Lessons learned from Japanese cost accounting:

- Cost accounting is organized separately from financial accounting.

- The purpose of cost accounting system is to control and reduce costs.

- KTQT still uses traditional cost determination methods, especially the total cost determination method.

- KTQT uses the target costing method in combination with various production management methods to control and reduce costs.

- Encourage enterprises to develop cost management models, including cost accounting.

Experience in applying Chinese cost accounting

China has similar economic development characteristics to Vietnam, also emerging from a centrally planned economy with an underdeveloped management accounting system. However, China's management accounting today is developing strongly in both theory and practice. The activities of setting standards and estimates are increasingly used in China for the purpose of planning and controlling costs. Cost classification according to different criteria, especially by level of activity, profit contribution analysis, and cost-volume-profit relationship analysis have been put into use by Chinese enterprises. A special point is that many Chinese enterprises use the standard cost method to determine costs, make estimates, control costs and evaluate activities. China's management accounting also uses the concept of responsibility accounting combined with ROI indicators to evaluate the performance of responsibility centers. However, modern accounting methods such as target costing and activity-based costing have not been widely applied in Chinese enterprises.

Lessons from China's Cost Accounting Experience

- KTQT needs to pay attention to the activities of setting standards and estimates as the basis for planning and controlling costs.

- Methods of cost classification, especially cost classification by activity level, contribution margin analysis, cost-volume-profit relationship analysis

profit to serve the purpose of evaluating results and making decisions.

- Responsibility accounting combined with ROI has been used to evaluate the performance of responsibility centers.

1.4.4. Lessons learned on cost accounting for Vietnam

Based on the lessons learned from international economics in other countries, the lessons learned for Vietnam in building a cost international economics system are as follows:

- Regarding cost classification, costs need to be classified according to different criteria to serve different purposes for managers to make decisions. Special attention should be paid to cost classification according to activity level, that is, costs are classified into fixed costs and variable costs.

- Regarding the construction of norms and estimates, enterprises need to pay attention to building a system of norms and cost estimates, which is the basis for implementing costs, controlling costs and evaluating the situation of cost usage.

- Regarding methods of determining costs by cost objects: Depending on the conditions of production and business organization, the conditions of production management organization to choose appropriate methods, can choose traditional methods such as determining costs by work or by process, choose the total method or direct method, ... or modern methods such as standard cost method, cost method by activity.

- Regarding information analysis for the decision-making process: Enterprises organize responsibility accounting, prepare departmental reports to control costs, revenue, profits and evaluate the performance of centers and departments, analyze the relationship between costs - volume - profits, etc.

- The cost accounting organization can be independent of the financial accounting or a part of the financial accounting.

In short , cost accounting is a part of the accounting system, aiming to provide information for managers to perform business management functions. In chapter 1, the author presented the relationship between cost accounting and cost management, thereby seeing the role of cost accounting in providing information for managers.

decision making in the process of performing business management functions. From there, the thesis has systematized the theory of cost accounting associated with the purpose of strengthening cost management in manufacturing enterprises from traditional and modern perspectives. The thesis focuses on the basic contents of cost accounting including: cost classification methods, methods of building a system of cost norms and production and business cost estimates, methods of determining cost prices, processing and analyzing cost information to serve the decision-making process. Cost accounting theory will be the basis for building a cost accounting system to strengthen cost management in manufacturing enterprises. The thesis also studies cost accounting apparatus models and cost accounting experiences of a number of countries in the world and draws lessons for organizing cost accounting models in Vietnam. Through chapter 1, the thesis has systematized cost accounting theory to strengthen cost management in manufacturing enterprises, as a basis for assessing the current situation and providing solutions to improve cost accounting to strengthen cost management in manufacturing enterprises.

Chapter 2

CURRENT STATE OF COST ACCOUNTING WITH ENHANCED COST MANAGEMENT IN THE

ANIMAL FEED PROCESSING ENTERPRISE

2.1. Overview of animal feed processing enterprises

2.1.1. System of animal feed processing enterprises

The animal feed industry in Vietnam is a young industry, born and developed with the Vietnamese livestock industry. Since the renovation period in the 90s, the animal feed industry in Vietnam has developed rapidly. Regarding the number of enterprises, according to the Animal Feed Association, by September 2006 there were 249 enterprises, by 2010 there were 315 animal feed enterprises nationwide, by August 2011 there were a total of 486 animal feed enterprises nationwide. The number of factories has increased along with the development of the industry and is distributed in the North, Central and South. Along with the increase in quantity, the growth rate of the animal feed industry has also increased over the years.

Year

Mixed feed	Concentrated food	Total (thousand tons)	Total (equivalent) (thousand tons)	Growth rate (%)
2000	1,700	330	2,030	2,690
2001	1,950	350	2,300	3,000	11.5
2002	2,400	340	2,740	3,420	14.0
2003	2,650	400	3,050	3,850	12.6
2004	2,700	400	3,100	3,900	1.3
2005	3,238	702	3,940	5,344	37.0
2006	4,361	747	5.118	6,600	23.5
2007	5,300	825	6.125	7,776	17.8
2008	6,882	684	7,567	8,935	14.9
Medium(%)					16.6

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Table 2.1: Animal feed production industry in Vietnam in the period 2000 - 2008

Source: Livestock Development Strategy to 2020 (Department of Livestock 2007) [3, p17]

According to the data of “Project CARD 030/06 VIE: Building strategies to enhance the competitiveness of rural small and medium enterprises in the agricultural value chain: The case of the animal feed industry, animal feed production ” ,

Distribution of animal feed production enterprises by production scale in the North and the South [3, p22]. Accordingly, the Red River Delta is the region that accounts for nearly half of the animal feed production enterprises, followed by the Southeast region and the Mekong Delta region. The remaining regions do not have or allocate very few animal feed production enterprises. According to the General Statistics Office, by 2010, 30% of animal feed production facilities applied good manufacturing practices (GMP), 70% of facilities had product quality analysis rooms, 100% of raw materials and products must be analyzed and quality tested. In fact, in recent years, the animal feed industry has encountered many difficulties. The main reasons are the continuous increase in input material prices, high interest costs, unfavorable exchange rate fluctuations for enterprises importing input materials, the epidemic situation, weaknesses in food quality control, input costs such as gasoline, oil, electricity, water, transportation costs, wages, etc. leading to unstable production and ineffective business, so some enterprises have withdrawn from the animal feed market. In addition, enterprises also face difficulties in the domestic supply of raw materials for animal feed production, especially protein-rich raw materials, which are still limited compared to domestic demand, so enterprises have to import to make up for the shortage. Therefore, Vietnamese animal feed enterprises face many difficulties and need support from the state and changes within each enterprise to overcome difficulties, reduce costs, increase profits and develop sustainably.

2.1.2. Product characteristics and product production organization in animal feed processing enterprises affect cost accounting

* Characteristics of animal feed products

Animal feed, also known as bran, is divided into many types. If divided by the type of feed for animal groups, there are lines of feed for livestock, feed for poultry, and feed for aquatic animals. If divided by the characteristics of the feed, there are lines of concentrated feed and mixed feed. For the concentrated feed line, farmers can

can be fed directly to animals without having to mix in additional feed. Mixed feed is in pellet form, when feeding, the farmer needs to mix in additional feed. Each feed line is divided according to age and nutritional needs.

The characteristics of animal feed products are that they are similar in terms of raw materials, size and value. Animal feed products have small value and large product volume. The list of manufactured products is stable and has little fluctuation. If there is any change, it is only a change in some components of animal feed ingredients due to changes in raw materials or changes in nutritional requirements of the product. Product prices are greatly affected by import policies of animal feed and animal feed ingredients: limits, import taxes, foreign exchange rates, etc. At the same time, animal feed production and consumption activities are directly affected by the livestock industry, as well as by weather, diseases and seasons.

Products of CBTACN enterprises mainly serve domestic consumption needs, export output is still limited and mainly to neighboring countries such as Cambodia, Laos... Animal feed products depend heavily on the production and breeding situation of farmers and farm owners, while the activities of these subjects are affected by many factors such as weather, natural disasters, epidemics... Therefore, the production and consumption of animal feed are indirectly affected by the above factors, so when developing a production and consumption plan, these influencing factors must be taken into account.

Raw materials for CBTACN include both imported and domestically purchased raw materials. However, most of the refined raw materials must be imported from foreign countries such as China, Thailand, India, etc. Meanwhile, raw materials are purchased domestically such as corn, soybeans, rice bran, fish fat, refined salt, and dried coconut. Domestic sources of raw materials for animal feed only meet 68-70% of the demand, the rest must be imported from abroad (about 20% of energy-rich raw materials, 80% of supplementary feed, 60-70% of protein-rich feed and more than 90% of additives), accounting for 45% of the total value of raw materials for industrial animal feed production.