Activity-based costing application in indirect material cost control-photo-resist

To improve competitiveness continuously, not only fix assets should be fully utilized but variable expense should be well controlled also. If we need to setup a reasonable review mechanism and minimize cost loss of indirect material excess usage or inventory shortage, which is caused by unaccomplished usage target. Activity-based costing method (ABC) is a kind of methodology to calculate more realistic cost instead of assigning product cost by assumptions. ABC is seeking the real activities that trigger cash flows, and judging the key factors for further cost reduction reference. This article is about linking ABC´s database with MES´s actual events to create some usage indices for cost control.