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1 MINISTRY OF EDUCATION AND TRAINING NATIONAL ECONOMICS UNIVERSITY TRAN THI DU Improvement of cost accounting and enhancement of cost management in animal feed processing enterprises. Major: Accounting (Accounting, auditing and analysis) Code: 62.34.30.01 SUMMARY OF THE DOCTORAL THESIS IN BUSINESS AND MANAGEMENT HA NOI - 2012 2 The work is completed in:…………………………………. …………………………………………………………………… Scientific instructor: 1. AP.Dr. Nguyen Thi Dong 2. AP.Dr. Dinh Thi Mai Judge 1:…………………………………. ………………………………………………. Judge 1:………………………………… ……………………………………………… Judge 1:………………………………… ……………………………………………… The thesis will be defended before the State-Level Thesis Marking Council in …………………………………………………………… ……………………………………………………………………… At………on……….…………………… For details about the thesis, please refer in the library:……… 3 PREFACE I. Introduction 1. The reason for choosing the research topic Accounting is considered as a tool of financial management because it provides the information necessary for finance through accounting reports, especially information of management accounting. Thus, in an enterprise, accounting is always connected with the functions of managers including planning, organization, direction and coordination, comparison of actual results with the plan. Animal feed processing enterprises (AFPEs) of the animal feed processing industry are operating in an environment with a lot of difficulties related to the production and consumption of products; improvement of accounting costs in AFPEs has become an urgent need for AFPEs to provide information for the process of cost management and business management of enterprises. Therefore, the author chose the topic "Improvement of cost accounting and enhancement of cost management in AFPEs" 2. The purpose of research With the research topic, the author will go into the systematization of theories of cost accounting in production enterprises. Also, the author will survey and assess the real situation of cost accounting in AFPEs in Vietnam. Since then, the author will offer solutions and conditions to apply cost accounting to AFPEs in Vietnam to enhance cost management in this type of enterpries. 3. Research subjects Firstly, the thesis studies theories of cost accounting in production enterprises in order to make a general theoretical framework of cost accounting that can be applied to production enterprises in general. Then, the thesis goes into the survey on the implementation of cost accounting work in AFPEs in the direction of analyzing enterprises’ size to assess the organization of the cost 4 accounting work on the basis of AFPEs’ sizes. 4. The scope of research The scope of research contents The author chooses the topic "Improvement of cost accounting and enhancement of cost management in AFPEs". Cost accounting to enhance corporate governance includes financial accounting and management accounting. However, for the purpose of enhancing cost management, the topic goes into studying of cost management accounting to provide information for enhancing cost management in AFPEs. For financial accounting, the author only studies at the combination level to collect information of historical costs. The scope of research subjects The author selects the research scope of AFPEs in the northern region because they are characterized by heavy concentration in the Red River Delta area and the northern area has a full of enterprises in all models for research. II. Overview of research There are many research topics on application of management accounting in enterprises, in which there are some research topics on the issue of cost management accounting in enterprises such as the thesis "Organization of production cost management accounting in animal feed production enerprises" (2006) (Pham Quang Man - National Economics University). The topic goes into the study of business and production cost accounting in three typical enterpries for three major types of business ownership including the Central Animal Feed Joint Stock Company, Peter Hand Hanoi Joint Venture Company and Kien Cuong Production and Trading Co., Ltd. However, the topic only offers assessment on the real situation of cost accounting in these three enterprises without the investigation and assessment on a large scale to draw objective conclusions of real situation of cost accounting for AFPEs in general and AFPEs according to each scale. In addition, there are some essays, thesiss studying this issue such as the thesis "Direction of building management accounting reporting system and organizing application to enterprises of Vietnam" (2002) (Pham Quang - National Economics University), the thesis 5 "Building of cost management accounting model in pharmaceutical enterprises of Vietnam" (2007) (Pham Thi Thuy - National Economics University), the thesis "Management accounting and analysis of production costs in the production sector in Vietnam" (2002) (Le Duc Toan- Academy of Finance.) Some theses also studied on accounting management as the thesis "Direction of building contents and organizing the application of management accounting to enterprises of Vietnam" by the author Pham Van Duoc (2007) (Ho Chi Minh City University of Economics), the author Tran Van Dung with the thesis: "Organization of management and cost price accounting in production enterprises in Vietnam" (2002 –Academy of Finance), the author Giang Thi Xuyen (2002) with the topic "Organization of management accounting and business analysis in state-owned enterprises", the author Pham Thi Kim Van (2002) with the topic "Organization of cost management accounting and business performance in tourism trading enterprises", the author Nelson U. Alino with the topic “The Effect of Management Accounting Systems on Reducing Conflict and Improving Decision-Making in Heterogeneous Groups” (University of Nigeria, 1990), the author Robin A. Sanford with the topic “The impact of activity-based costing on organization performance (Nova Southeastern University, 2009), etc. However, the above mentioned theses and researches have had non-comprehensive scope of research and not resolved the research problem that the author is interested yet. That was improvement of cost accounting to enhance cost management in enterprises in animal feed processing industry; therefore, the author chose the topic "Improvement of cost accounting and enhancement of cost management in AFPEs" as research topic of the thesis. III. Research methodology: The author delivered investigation sheets to 52 AFPEs and interviewed four AFPEs that were Rural Technology Development Joint Stock Company, CP Vietnam Corporation - Xuan Mai Branch, Hoang Linh Breeding Technology Development Joint Stock Company, Vimark Company Ltd. The author used SPSS software to collect and classify data in order to demonstrate assessments and summaries of the thesis. 6 IV. The layout of thesis: In addition to the preamble and conclusion, the thesis includes three major chapters: Chapter 1: Basic theory of cost accounting and cost management enhancement in production enterprises Chapter 2: Real situation of cost accounting and cost management enhancement in AFPEs Chapter 3: Improvement of cost accounting and enhancement of cost management in AFPEs 7 Chapter 1: BASIC THEORY OF COST ACCOUNTING AND COST MANAGEMENT ENHANCEMENT IN PRODUCTION ENTERPRISES 1.1. Concepts of cost, cost management and cost accounting information and enhancement of cost management in production enterprises 1.1.1. Concept of cost According to the conception of political economy, cost is the monetary valuation of wastes of human labor and materialized labor that enterprises invest in production and business organization for a certain period of time. According to the concept of cost from the accountant's perspective, in financial accounting, "cost includes production and business costs arising in the business operation of enterprise and other costs." For management accounting, costs are very various. It can be actual costs incurred such as costs in financial accounting; in addition, there are estimated costs that are non-incurred costs, opportunity costs are the costs that are not in the accounting books or could be estimated or expected costs of an activity. Thus, there are a lot of concepts of cost, especially in management accounting. This indicates that there is no single definition for the cost because of two reasons: Firstly, the costs incurred and used for some specific purposes; secondly, the way to use cost will determine how to calculate the cost and record, analyze, process costs. For management accounting, depending on the purpose of using cost information, the cost will be collected, calculated and analyzed in different ways or under different classifications to exploit relevant cost information for decision-making in a most efficient way. 1.1.2. Cost management, cost accounting information and enhancement of cost management in production enterprises Corporate governance is a continuous, organized and targeted process of impact of enterprise owner on employees in it, using the best of the potential and opportunity to implement its business and production activities to achieve the set 8 forth goals in accordance with the laws and social practices. Performing corporate governance is the process of implementing major functions of corporate management and decision-making surrounding four major functions: planning, plan implementation, performance measurement, and comparison of actual results with the plan. Cost management includes a system of methods developed for planning and control of activities leading the arising of enterprises’ costs. Cost accounting plays an important role in providing useful information for cost managers, serving them in gathering their competence on the strengths, looking for opportunities, identifying resources with the lowest cost and improving the products’ and services’ quality. 1.2. Cost accounting to serve cost management in production enterprises 1.2.1. Classification of costs in business and production enterprises to serve cost management Contents of cost are very diversified and rich and can be categorized according to many different criteria. The thesis states seven ways of cost classification: Cost classification according to operation functions, cost classification based on cost factors, cost classification based on cost behavior, cost classification based on the relationship between cost and object of cost accumulation, cost classification based on the relationship between costs and financial statement, cost classification based on the level of control of managers. Cost classification serves analysis and comparison in order to make decisions on selecting the optimal business project. 1.2.2. Building of cost norms and cost estimates in production enterprises Cost norms are the combination of the spent costs per product unit through trial production or testing. Estimation is a plan on using resources in a period, expressed as detailed expectations of the mobilization and use of production factors, financial resources to ensure that the activities of the 9 enterprise takes place normally, contributing to improve the effectiveness of all activities. * Building of cost norms: Norm of direct material costs, norm of direct labor costs, norm of production overhead costs, norm of sales cost, and norm of corporate governance cost. * Cost estimates. Cost estimates are divided into static estimates and flexible estimates: Static estimates: are estimates built on a level of operation in order to provide information of cost, revenue and profit of enterprise that can be achieved under the selected business project. The thesis presented direct material cost estimates, direct labor cost estimates, production overhead cost estimates, sales cost estimates and corporate governance cost estimates. Flexible estimates: are estimates built on a series of operational levels to provide information of cost, revenue and profit of enterprises that can be achieved under the business projects and possibilities. 1.2.3. Determination of costs for cost objects 1.2.3.1. Collection of cost information Collection of accounting information is often expressed through such stages as: collection of initial information about costs through a system of documents, collection, classification and systematization of cost information on accounts and accounting books, collection of information through a system of accounting reports. 1.2.3.2. Cost determination methods for cost objects * Traditional cost determination methods for cost objects - Full cost determination method. According to this method, production costs are all costs related to production, including direct material costs, direct labor costs, production overhead costs. - Direct cost determination method. According to this method, only variable costs of production are counted in production costs. A part of production overhead costs and the remaining fixed production overhead cost are 10 considered as a kind of periodical cost, which is excluded in product costs. In the traditional methods of cost determination, if basing on the source of cost data, costs can be determined according to the actual cost method, normal cost method or standard cost method. If basing on the characteristics of the product and technology process to create products, one of the following two methods of cost calculation can be selected: work-based cost determination and production-process-based cost determination. * Modern methods of cost determination for cost object - Activity-based cost- ABC is a method to determine costs by identifying cost centers or activity centers in an organization and assigning costs to products and services based on the number of events or transactions related to the process of providing a product or service. According to this method, overheads are allocated through two stages below: 1. Stage 1: Determination of activity-based costs 2. Stage 2: Allocation of activity-based costs to products, customers Putting ABC model into use under the theory initially faces a lot of difficulties and is costly; therefore, up to November 2003, the author Robert S. Kaplan and Steven R. Anderson introduced the concept of activity-based cost determination on the basis of time allocation (Time-driven ABC), in this manner, it is necessary to identify two parameters: Firstly, how many costs are needed for a time unit of the department with incurred costs. Secondly, how many time units are needed to implement the activity. In addition, ABC method uses activity level – based cost allocation. As a result, in the process of ABC system development, three allocation criteria are formed: + Operating frequency based cost allocation + Time - based cost allocation + Work level - based cost allocation 11 - Target cost is the aggregation of methods and administrative tools permitting to achieve objectives of cost and operation in the stage of designing and planning new products. This method also allows providing the basis of control at the production stage and guaranteeing these products to achieve profit targets that have been identified in line with the life cycle of product. 1.2.4. Cost analysis and decision-making on cost management - Analysis of cost fluctuation through historical information analysis. Analysis of cost fluctuation through historical information analysis includes cost fluctuation analysis based on cost norms and cost estimates, analysis and assessment of performance of responsible centers, cost fluctuation analysis through cost price reports and business performance reports. - Analysis of appropriate information for decision –making and future forecast. Analysis of future information includes analysis of the relationship of Cost-Volume-Profit, analysis of breakeven point and use of appropriate information for decision – making. 1.3. Cost accounting apparatus models Management accounting and financial accounting models are under combined model, separate model and hybrid model. 1.4. Experience on cost accounting of several countries in the world and lessons for Vietnam - Experience on using cost accounting of the U.K. and the U.S. - Experience on using cost accounting of the European countries - Experience on using cost accounting of the Asian countries - Lessons learned about cost accounting for Vietnam From experienced lessons about management accounting of countries, Vietnam can learn to build a cost accounting system for its enterprises. In short, cost accounting is a part of the accounting system to provide information for managers to perform functions of corporate governance. In the 12 chapter 1, the author presents the relationship between cost accounting and cost management, from which the role of cost accounting in providing information for managers to make decisions in performing functions of corporate governance will be found. Since then, the thesis systematizes theories of cost accounting associated with the purpose of enhancing cost management in production enterprises from the traditional and modern point of view. The thesis focuses on basic contents of cost accounting including: cost classification methods, methods of building the system of cost norms and cost estimates, methods of cost determination, processing and analysis of cost information to serve decision-making. Cost accounting theory will be the basis for the construction of a cost accounting system in order to enhance cost management in production enterprises. The thesis also studies cost accounting apparatus models and experience on cost accounting of some countries in the world and draws lessons for the organization of cost accounting model in Vietnam. Through the Chapter 1, the thesis systematizes theories of cost accounting to enhance cost management in production enterprises, as a basis to assess the situation and offer solutions to perfect cost accounting to increase cost management in AFPEs. 13 Chapter 2: REAL SITUATION OF COST ACCOUNTING AND COST MANAGEMENT ENHANCEMENT IN AFPES 2.1. Overview of AFPEs - System of AFPEs Animal feed processing industry in Viet Nam is a fledgling industry that is advent and developed in line with the breeding sector in Vietnam. Since 90’s period of reform, animal feed processing industry of Vietnam achieved rapid development steps. According to Animal Feed Association, until September, 2006, there were 249 companies; in 2010, there were 315 AFPEs; in August 2011, there were 486 AFPEs all over the country. Number of factories have increasingly grown along with the development of the industry and have been distributed in the North, the Central and the South. Along with the increase in number, growth rate of animal feed processing industry has also increased over the years. Table 2.1: Animal feed production industry in Vietnam in the period of 2000 - 2008 Year Compound feeds Concentrated feeds Total (Thousand tons) Total (Equivalent conversion) (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 14 2007 5,300 825 6,125 7,776 17.8 2008 6,882 684 7,567 8,935 14.9 Average (%) 16.6 Source: Breeding Development Strategy to 2020 (Department of Livestock Production 2007) - Product characteristics and production organization in AFPEs affecting cost accounting. Animal feed production technology is characterized by mass production. Animal feed production process is a continuous and closed one. Diagram 2.1: Process of animal feed processing - Management system in AFPEs. In investigated AFPEs, there were 22 joint stock companies accounting for 42.3%, 29 limited companies accounting for 55.8% and only one private enterprise, accounting for 1.9%. - Characteristics of financial mechanism in AFPEs . Managers take initiative in determining long-term targets such as investment in expanding or Compound feeds Put materials Grinding Tank Mixi ng table Concentrat ed - Steam chamber to ripen Palletizin g Freezing Screening Weighing, packing Weighing, packing Put materials 15 narrowing production and in short-term decisions such as regulations on cost norms, cost estimates, decisions on the use of resources and in decision on sales pricing. - Characteristics of accounting apparatus organization and accounting policies applied in AFPEs. All animal feed production activities are concentrated at the factory, so accounting apparatus organization is selected in the concentrated form. - Cost management in AFPEs. AFPEs are organized in the form of online functionality. Cost information system is mainly provided for the board of directors by accounting department. 2.2. Real situation of cost accounting serving cost management in AFPEs 2.2.1. Real situation of cost classification - As regards cost-purpose-and-use-based cost classification : All AFPEs implement cost classification based on purpose and cost use. - As regards cost-behavior-based cost classification : AFPEs have initially classified costs based on cost behavior and some enterprises have used methods to separate mixed costs into fixed costs and variable costs. Small and medium-sized enterprises had higher rate of splitting production overhead costs, sales cost and corporate governance costs into fixed costs and variable costs than small-sized ones. 2.2.2. Real situation of building of cost norms and cost estimate - Real situation of building of cost norms: AFPEs have attached special importance to building of cost norms; however, the rate of building of cost norms in medium and large sized enterprises is higher than other small ones. - Real situation of cost estimate : Companies have paid attention to making sales estimates. The remaining estimates had a low rate of estimation. 2.2.3. Real situation of cost determination for cost object - Real situation of collection of cost information: System of accounting documents, system of cost accounting accounts and system of accounting books have met the needs of financial accounting; however, as for management 16 accounting, real situation of information collection made no contribution to the collection of cost information as requested. - Real situation of cost determination for cost object in AFPEs + Real situation of production cost determination in AFPEs: In AFPEs, production costs are detailed for each type of product or generally gathered for the whole workshop. Cost object is finished product in the last stage of production technology process; object of cost pricing is each type of product. + Transfer of production costs and assessment of products in progress: In AFPEs, the entire cost of production will be transferred to Accounts 154 or 631 to calculate cost price. + Calculation of cost price of finished products: Through the survey, 100% of surveyed AFPEs selected cost object that was each type of product, 46/52 enterprises (88.5%) used simple method, 5/52 enterprises (9.6%) used the ratio method, and only one enterprise (1.9%) selected coefficient method. According to the survey results, two among 52 surveyed enterprises calculated cost price according to variable cost method, of which there were one medium-sized enterprise and one large-sized enterprise. All the surveyed AFPEs did not apply ABC method. - Real situation of cost sales accounting and corporate governance cost in AFPEs. Sales cost and corporate governance cost are generally gathered into Accounts 641, 642 and at the end of the period they are transferred to Account 911. 2.2.4. Real situation of cost analysis and decision – making on cost management - Real situation of cost fluctuation analysis through historical information analysis + Analysis of cost fluctuation based on cost norms and cost estimates: According to the survey results, most of enterprises made comparison and analysis of cost and cost price. 50/52 enterprises (96.2%) compared actual costs with costs of the previous period or estimated costs and 51/52 enterprises (98.1%) made a comparison of actual cost price with cost price of the previous 17 period, normative cost price or planed cost price. + Analysis and assessment of performance of responsible centers, departments. As for determination of indicator of gross profit of each product: According to the survey results, 41/52 surveyed enterprises (accounting for 78.8%) determined gross profit indicator for each type of product. As for allocation of sales cost and corporate governance cost in order to determine profit at departments: The number of surveyed enterprises allocated sales cost and corporate governance cost for each type of product, market, branch according to the following correlative ratio: 16/52 enterprises (accounting for 30.8%), 8/52 enterprises (making up 15.4%), 4/52 enterprises (accounting for 7.7%). The criterion that enterprises selected were the allocation based on output, revenue or prime cost + Analysis of cost fluctuation through reports on costs 36/52 enterprises (69.2%) determined the rate of return on investment capital (ROI), 10/52 enterprises (19.2%) determined Residual Income (RI) and 17/52 enterprises (32.7%) identified the rate of net return on assets. + Analysis of cost fluctuation through the reports on costs, cost price and business performance: The number of AFPEs implementing cost fluctuation analysis through the reports on costs, cost price and business performance were few. - Real situation of relevant information analysis for decision-making and future forecast Output analysis : According to the survey results, up to 50/52 enterprises (accounting for 96.2%) conducted the comparison and analysis of actual production output with planed output or design-capacity-based output. Determination of breakeven point : According to the survey results, AFPEs initially performed determination of breakeven point. 2.2.5. Real situation of cost accounting apparatus model: Management accounting department in AFPEs was organized commonly with financial accounting apparatus, i.e. mixed cost accounting apparatus models. 18 2.3. Assessment of cost accounting situation in AFPEs 2.3.1. Assessment of real situation of cost classification - Cost-purpose-and-use-based cost classification: AFPEs classified costs based on cost purpose and use; however, refection scope of some types of costs was broken. - Activity-level-based cost classification: Rate of enterprises classifying costs based on activity level is low. 2.3.2. Assessment of building of cost norms and cost estimate - As for building of cost norms : The rate of AFPEs building cost norms is relatively high. Medium-sized and large-sized enterprises had higher rate of building cost norms than small sized ones. - As for cost estimate : AFPEs was initially interested in estimates, especially sales estimates; large-sized enterprises had higher rate of estimation than small and medium-sized ones. Thus, building of cost norms and cost estimate in AFPEs were not carried out completely and synchronously. 2.3.3. Evaluation of cost determination for cost objects - Evaluation of real situation of cost information collection For documents: Accounting documents have not been added indicators to serve for collecting information about management accounting in order to meet the needs for providing information for cost accounting to enhance cost management in the enterprises. For usage accounts: As for financial accounting, most of AFPEs complied with the provisions on accounting accounts of financial accounting. However, accounting accounts did not serve management accounting. - Evaluation of real situation of cost determination in AFPEs For object of cost accumulation and cost object : AFPEs selected object of production cost accumulation that was each product or each workshop and cost object being each type of product. However, they did not calculate cost for each product batch or determine the cost for each customer or branch to assess the profitability and performance of each customer or branch. For methods of cost determination: All surveyed AFPEs identified cost 19 of products according to the actual cost method and determined the cost of products according to the full cost methods. The number of AFPEs applying normal cost method and direct cost method was few and no enterprise applied ABC method. - For overhead cost allocation : Overhead costs in AFPEs were arising costs related to many cost objects and most of the AFPEs selected output as allocation criteria; the remaining companies used criterion of direct material costs. 2.3.4. Evaluation of processing and analysis of relevant cost information for decision – making - Evaluation of cost fluctuation analysis through historical information analysis Analysis of cost fluctuation based on cost norms and cost estimates: Almost enterprises compared the actual output, actual costs, and actual cost prices with the set forth plan or estimates, etc, in order to assess the implementation, to detect difference in order to have appropriate corrective measures for the next period. Analysis, assessment of performance of responsible centers, departments: AFPEs only evaluated business performance of the whole enterprise through indicators of ROI, RI and ROA that are used to assess the results of general business operation of the entire enterprise. Due to non-organization of responsibility accounting, AFPEs did not evaluate the performance of cost centers. Analysis of cost fluctuation through the reports on cost price and performance : AFPEs only reported cost price according to the full cost method to perform analysis of cost price fluctuation according to each factor of direct material costs, direct labor costs and production overhead costs. Reporting system of management accounting has not been built completely and systematically yet. - Assessment of appropriate information analysis for decision – making and future forecast For analysis of cost-profit-volume (CPV). The rate of enterprises 20 determining breakeven point of sales is low, suggesting that many enterprises did not really attach much importance to determine these indicators as a basis for the implementation process. For analysis of appropriate cost information for decision-making on corporate governance in the special cases: Many AFPEs did not pay attention to the processing and analysis of cost information serving cost management and decision-making. 2.3.5. Assessment of real situation of cost accounting model AFPEs implemented combined cost accounting model, so costs were saved, apparatus was compact but works of management accounting were not professionalized and information was not timely provided. In summary, the need for providing cost accounting information for managers in AFPEs is very huge in the context of highly increasing price of raw materials, increasing production costs and consumption of products facing a lot of difficulties. The thesis used scientific methods to review real situation of cost accounting and cost management enhancement in AFPEs. The thesis provided the advantages, limitations and reasons of cost accounting situation in AFPEs in terms of cost classification, norm establishment and cost estimate, cost determination for cost object and analysis of relevant cost information serving decision-making. It also reviewed the current situation of cost accounting model in AFPEs. Since then, it offered conclusions on the real situation of cost accounting and enhancement of cost management in AFPEs that had many limitations, did not fully provide cost information systems necessary for cost management in AFPEs. Therefore, it is necessary to improve cost accounting to enhance cost management in AFPEs. Assessments and conclusions on the real situation of cost accounting in AFPEs will be the basis for the thesis to provide specific recommendations to improve cost accounting in AFPEs in the chapter 3, helping to improve effectiveness of cost management, bringing higher profit to AFPEs. [...]... of AFPEs in reality strategy also provides development orientation to 2020 of animal feed including estimates of direct material costs, estimates of direct labor costs and processing industry that is strong development on the basic of scale expansion, estimates of production overhead cost and these estimates were made according technological innovation, and improvement of product quality and lowering... two directions of static estimates and flexible estimates product’s cost price Output of industrial animal feed: average increase of 7.8% / 3.3.3 Identification of cost price for cost object year, reaching about 19 million tons Therefore, the animal feed processing 3.3.3.1 Collection of cost information industry has received the attention of the State; however, it is necessary to The thesis recommended... accumulation to calculate cost management of the state These enterprises are proactive in the mobilization and price for each product, each customer and each branch use of business and production capital To achieve high business performance, * Reporting system to serve cost management in AFPEs The author recommended two reporting systems, including: managers of enterprises in general and AFPEs in particular... appropriate cost accounting Theoretical progress of management accounting” Accounting-Auditing model with the characteristics of business and production organization and Magazine, Edition dated August 2011 matching with the scale of AFPEs Also, the author provided basic conditions to 2 Tran Thi Du (2011), “Methods of mixed cost analysis: From theory to carry out solutions to improve cost accounting in AFPEs . management accounting to enterprises of Vietnam" by the author Pham Van Duoc (2007) (Ho Chi Minh City University of Economics), the author Tran Van Dung with the thesis: "Organization. best of the potential and opportunity to implement its business and production activities to achieve the set 8 forth goals in accordance with the laws and social practices. Performing. operation in order to provide information of cost, revenue and profit of enterprise that can be achieved under the selected business project. The thesis presented direct material cost estimates,