Kế toán chi phí sản xuất kinh doanh trong các công ty sản xuất thép việt nam trên địa bàn các tỉnh miền trung tt tieng anh

sMINISTRY OF EDUCATION AND TRAINING
VIETNAM UNIVERSITY OF COMMERCE
-------------------------

DUONG THI MY HOANG

ACCOUNTING OF THE PRODUCTION
AND BUSINESS COSTS AT STEEL COMPANIES
IN CENTRAL VIETNAM

Major: Accounting
Code: 934.03.01

SUMMARY OF THE PHD THESIS IN ECONOMICS

Hanoi, 2020


The work was finished at
Vietnam University of Commerce

Advisors:
1. Assoc. Prof. PhD. Do Minh Thanh
2. Assoc. Prof. PhD. Ha Thi Thuy Van

1st independent reviewer:…………………………………….
2nd independent reviewer:……………………………………
3rd independent reviewer:……………………………………

This thesis was defended at The Doctor of Engineering Committee in
………………………

at ……………… on ……………………….

For the details of the thesis, please contact:
National Library of Vietnam
Library of Vietnam University of Commerce


1
INTRODUCTION
1. The urgency of the topic
Production and business costs are one of the important indicators in
the system of economic indicators for business management, which are of
great interest to business owners. Production and business cost accounting
is a part of the enterprise accounting system and plays an important role in
providing information about production and business costs for making the
financial statement and helping managers to make planning, control and
decision.
Therefore, accounting in general and production and business cost
accounting in particular need to be completed to provide information
timely, truthfully and accurately, suitable for management requirements for
the company’s business decisions. From the said reasons, the author has
selected “Production and business cost accounting at steel companies in
Central Vietnam” as the topic of the PhD thesis.
2. Overview of research situation related to the topic
2.1. The research works on production and business cost accounting
in the aspect of financial accounting
There have been some works related to this research topic such as
Nguyen Thu Hien (2016), “Completion of accounting of production costs
and calculation of product prices in the clothing companies in the area of
Hung Yen City”, Nguyen Thi Dieu Thu (2016), “Completion of accounting

of production costs and calculation of software product prices in software
production companies in Vietnam today”, etc. In general, they have
generalized, analyzed, assessed the situation and showed basic limitations
on expense and cost accounting at companies in related business lines. For
the foreign research works, Vvchudovet (2013), “Current state and
prospects of cost accounting development for sugar industry enterprise”
presents the current situation and factors affecting the development of cost
accounting at companies. Naughton-Travers, Joseph P. (2009), “ActivityBased Costing: The new Management Tool” have mentioned the
information and superiority of activity-based cost accounting methods.
Michael R. Kinney & Cecily A. Raiborn (2011), “Cost Accounting:
Foundations and Evolutions” have mentioned the accounting of
production costs in the aspects of terms of production costs, measurement,
identification of cost types, activity-based costs, methods of calculating


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costs according to orders, production processes and analyzing expenses as
the basis for making production decisions or determining the selling price.
2.2. The research works on production and business cost accounting
in the aspect of management accounting
Cost management accounting is one of the basic contents of the
organization of company management accounting in the system of
accounting organization of the unit. Dam Phuong Lan (2019), “Activitybased cost accounting in domestic animal feed companies”, Pham Thi
Thuy (2007), “Model building of cost management accounting in Vietnam
pharmaceutical companies”, To Minh Thu (2019), “Completion of cost
management accounting in Vietnam paper companies”, etc. have made
solutions to complete and expand the research direction on the
organization of cost management accounting. Kaplan, Robert S.; Atkinson,
Anthony (2015) have generalized and developed management accounting
at companies including the role of management accounting, cost handling

method, cost distribution according to ABC model, building the cost
centers at companies, costs for the decision-making, method of balanced
scorecard. Maelah R, Ibrahim D. N, (2007) have researched the factors
affecting the application of ABC model in manufacturing companies. A
dam Paul Brunet, Steve New (2003) have researched Kaizen costing as a
practice in Japanese companies. Alkinson, Kaplan & Young (2012),
“Management accounting” have mentioned the aspects of management
accounting including the concepts of cost management accounting,
methods of aggregating and allocating costs, measurement and activity
accounting. Charles T. Horngren (2016), “Cost Accounting: A Managerial
Emphasis” has emphasized the role of cost information in management
accounting.
2.3. The research works on cost accounting and production and
business costs in the aspect of financial accounting combining with
management accounting
There have been some works related to this research topic in different
aspects and applied application areas such as Do Thi Hong Hanh (2015),
“Completion of accounting on revenue, expenses and business results at
steel companies of Vietnam Steel Corporation”; Dao Thuy Ha (2015),
“Completion of cost management accounting in Vietnam steel
companies”; Dao Manh Huy (2016), “Completion of preparing and
presenting the consolidated financial reports at steel companies of


3
Vietnam Steel Association”; Nguyen Thi Nga (2017), “Environmental cost
management accounting in Vietnam steel companies”; Tran Thi Quynh
Giang (2018), “Completion of accounting information system at steel
companies of Vietnam Steel Corporation”. The research projects abroad
include PhD thesis of Topor Ioan Dan (2013), “New dimensions of cost

type information for decision making in the wine industry” focuses on the
research of cost information for decision making in winemaking in
Bulgaria. Majid Nili Ahmadabadi, Ali Soleimani (2013), “Feasibility
Study for Implementation of an Activity - Based Costing System in Alloy
Steel Industries”, they have shown 8 factors affecting the applicability of
activity-based cost method in the steel manufacturing industries in Iran.
According to Eva Wager (2013), ABC used to be the most appropriate cost
determination method for small steel companies. Mohammad D.A1 -Tahat,
AI -Refaie Abbas (2012) studied the traditional ABC implementation
process in cast steel factories which has specific illustrations of ABC in
terms of making cost distribution technique and calculating the product
prices but not connecting with ABC and ABM yet, etc.
2.4. Research chance of the thesis
Through the research of foreign and domestic works of clarifying and
confirming the importance of production and business cost accounting for
companies, there have not been any topics of deep research on production
and business cost accounting in both aspects of financial accounting and
management accounting. Therefore, the author finds the chance for the
research of production and business cost accounting at steel companies in
Central Vietnam in the context of current international economic
integration is very essential.
3. Research objective and mission
- Research objective: Studying and proposing solutions to complete the
production and business cost accounting at steel companies in Central
Vietnam in the context of international integration.
- Research mission:
+ Systematize, analyze and clarify general theoretical issues on
production and business cost accounting at steel companies in the aspects
of financial accounting and management accounting.
+ Survey, analyze, assess the actual situation of production and

business cost accounting at steel companies in Central Vietnam in the
aspects of financial accounting and management accounting. Therefore,


4
specify the results, limitations and causes.
+ On the basis of theory and practice, propose the solutions to
complete the production and business cost accounting at steel companies in
Central Vietnam and make sure the information provision on production
and business costs in order to meet the management requirements of
resource costs during the international integration.
4. Research questions of the thesis
To achieve the research objectives, the author makes some research
questions include:
(1) General theory of production and business cost accounting and
samples of production and business cost accounting in both aspects of
financial accounting and management accounting at companies in the
market economy during the international integration?
(2) Actual situation of production and business cost accounting at
steel companies in Central Vietnam in both aspects of financial accounting
and management accounting, outstanding matters and causes?
(3) Solutions and recommendation to complete the production and
business cost accounting at steel companies in Central in order to meet the
management requirements in the market economy during the international
integration?
5. Subject and scope of study
5.1. Subject of study
The thesis focuses on the research of theories and actual situation
about production and business cost accounting at steel companies in
Central Vietnam.

5.2. Scope of study
- Regarding the area: The survey scope is at steel companies in Central
Vietnam, except for private companies with a super-small manufacturing
scale. The thesis focuses on the research of common production and
business cost accounting with billets and steel products at steel companies
in Central Vietnam. Do not research on the accounting of financial costs
and other costs.
- Regarding the time: The thesis makes a survey of the actual situation
of production and business cost accounting at steel companies in Central
Vietnam for 4 years from 2015 to 2018.


5
- Regarding the content: The thesis researches on both aspects of
financial accounting and management accounting.
6. Method of study
6.1. Method of study
- Technical method: Using a combination of research methods such as
induction, interpretation, analysis, synthesis, comparative analysis, field
surveys to analyze and evaluate in order to make reasonable conclusions.
- Method of information collection: Primary and secondary
information collection method.
- Method of processing and analyzing data: The main methods used by
the author in data processing include methods of statistics, qualitative
analysis and comparison, etc.
6.2. Process of study
The process of study of the thesis is shown in the charts.
7. New contributions of the thesis
7.1. New academic and theoretical contributions: The thesis has
systematized the general theories on production and business costs at

companies in both aspects of financial accounting and management
accounting. Therefore, learn experience and draw lessons on production
and business cost accounting at Vietnam steel companies.
7.2. New practical contributions: Assess the actual situation and
propose the solutions to complete the production and business cost
accounting at steel companies in Central Vietnam.
8. Structure of the thesis
Chapter 1: General theory of production and business cost
accounting in manufacturing enterprises
Chapter 2: Actual situation of production and business cost
accounting at steel companies in Central Vietnam
Chapter 3: Completion of production and business cost accounting
at steel companies in Central Vietnam


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CHAPTER 1. GENERAL THEORY OF PRODUCTION AND
BUSINESS COST ACCOUNTING AT STEEL COMPANIES
IN CENTRAL VIETNAM
1.1. Definition, nature, classification of production and business costs
in the manufacturing companies
1.1.1. Definition, nature of production and business costs
During the production and business activities, companies have paid for
resources such as manpower, materials, capital for production, labor work,
transportation and investment.
Until now, there have been many definitions of production and
business costs. It means that there is no only definition of production and
business costs. In my point of view, the production and business costs are
all expenses of resources paid by the companies related to the production
and business activities in a certain period (month, quarter, year) and

presented by a currency measure.
Nature of production and business costs: During the production and
business activities, companies are always aware of the principle of
ensuring to cover the costs invested to produce and consume products and
other costs. Therefore, the nature of production and business costs is the
movement of factors during the production and business activities in the
period into the product value.
1.1.2. Classification of production and business costs
To facilitate the cost management and cost accounting organization,
companies often classify production and business costs in both aspects of
financial accounting and management accounting according to the
following factors: Based on the content and the economic nature of costs;
based on the purpose and use of costs; based on the input of the production
process at companies, etc.
1.1.3. Management requirements of production and business costs
- Must correctly determine the content and scope of production and
business costs incurred during the production and business activities.
- The management must save costs on the basis of promoting
production and business activities and improving product quality.


7
- Manage the production and business costs according to each activity,
object, location, item, cost factor, etc.
1.2. Production and business cost accounting in the manufacturing
companies in the aspect of financial accounting
1.2.1. Accounting principles governs production and business cost
accounting
Production and business cost accounting must ensure the following
principles: Principles or original price, consistency, conformity, prudence,

materiality and continuous operation, etc.
1.2.2. Determine the production and business costs
On the basis of content, the scope is identified to correctly and fully
calculate the production and business costs, the accountant determines the
production and business costs according to each item and type of expense
including costs of direct raw materials, direct labor, general production,
selling, administration and the production and business costs for unfinished
products. In which, methods of assessing unfinished products at the end of
the period include evaluation of unfinished products according to costs of
main direct materials (or costs of direct raw materials), unfinished products
according to an equivalent amount of completed product, unfinished
products at cost norms.
1.2.3. Record the production and business costs
The accounting subject of production and business cost collection
needs to be determined to record the production and business costs.
Accounting for collecting production and business costs:
- Direct method: often used for the costs related directly to the subject
of cost collection and can be accounted directly for each subject.
- Indirect allocation method: Apply when costs are related to many
objects, need to aggregate to allocate to objects in reasonable standards.
Therefore, on the basis of the certain accounting method, the
production and business cost accounting is conducted as follows:
Accounting vouchers of production and business costs: including
cost vouchers of direct materials, general production, selling and company
administration. In particular, the vouchers related to production and
business costs are VAT invoices, Sales invoices, goods delivery notes,


8
goods received notes, Payments, Credit notes, Debit notes, Payrolls, fixed

asset records, etc.
The account of production and business costs: The cost collection
depends on the companies make accounting on the inventory by a regular
statement or the periodical inventory. Production and business cost
accounting uses the following accounts: TK621 – “Direct material costs”,
TK622 – “Direct labor costs”, TK627 – “General production costs”,
TK641 – “Selling costs”, TK 642 – “Company management costs”.
Production and business cost accounting is shown in the following
charts: Charts of unfinished production and business cost accounting,
selling cost accounting and company management cost accounting in
manufacturing companies.
1.2.4. Presenting the information on production and business costs
In the financial statement, the information on production and business
costs is shown in the basic criteria: original price of sales products, sales
price, company management costs (Report of business results) and
unfinished production and business cost (Balance sheet). At the same time,
it is explained in details in the Financial Statement.
1.3. Production and business cost accounting in the manufacturing
companies in the aspect of management accounting
1.3.1. Making norms and estimates of production and business costs
Norms of production and business costs: It is the crystallization of
production and business costs consumed by a unit of product through trial
production or experimentation. Norms are a measure of determining
expenses for a necessary product unit.
Estimates of production and business costs: It is a plan to use
resources in a period, showing detailed estimates of the situation of
mobilizing and using factors of production and financial resources to
ensure the normal operation of companies, contributing to improving the
efficiency of all activities.
1.3.2. Information collection of production and business costs for

management requirements
Methods of determining production and business costs:
- Methods of determining costs by job


9
- Methods of determining costs according to the production process
On the basis of the method of determining costs, depending on the
qualifications and management requirements of companies, cost
accounting management may use appropriate cost-determination methods
as follows:
+ According to the actual cost method
+ According to the common cost method
+ According to the standard cost method
According to the author, methods of common cost and standard cost
are more preeminent than the actual cost method because they provide the
information faster and simplify the bookkeeping process.
Method of information collection of production and business costs
On the basis of the method of cost determination to collect
information for company management requirements, management
production and business cost accounting use the following methods:
- Accounting vouchers: On the basis of vouchers of financial
accounting reflecting incurred production and business costs, based on the
management accounting requirements to supplement the details; making
and recording fully and accurately the arisen economic events will help the
next steps to carry out smoothly, ensuring quick information provision,
meeting requirements of appropriately, usefully and timely.
- Accounting accounts: The organization of accounting accounts to
collect previous information for decision-making should be conducted in a
systematic and scientific manner while ensuring the detailed information

provision according to management requirements as well as comparison
ability between detailed information and relevant general information on
specific accounting objects.
- Accounting books: System of accounting books, especially detailed
books need to be designed with the number, type, criteria in accordance
with management requirements and technology equipment level for
information processing at companies.
- Management accounting report of production and business costs:
On the basis of the information collected at companies, setting up a
system of management accounting reports for company owners to manage


10
costs such as cost reports according to the center of cost responsibility; cost
reports in stages, etc.
1.3.3. Analyzing production and business costs information for
management requirements
Depending on the information needs of the managers, the accountant
will analyze the information on corresponding production and business
costs.
1.4. Production and business cost accounting in foreign countries
and business lessons for Vietnamese manufacturing companies
1.4.1. Production and business cost accounting in foreign countries
Production and business cost accounting in American accounting system
Production and business cost accounting in French accounting system
Production and business cost accounting in Japanese accounting system
1.4.2. Business lessons of production and business cost accounting
for Vietnamese manufacturing companies
Through the production and business cost accounting in America,
France, Japan, we can draw business lessons of production and business

cost accounting for Vietnamese manufacturing companies.
CONCLUSION OF CHAPTER 1
In Chapter 1, the thesis has systematized and analyzed to clarify
common theories on production and business costs at companies such as
the concept, nature, classification method of production and business costs.
From that, it has analyzed and clarified the content production and business
cost accounting in manufacturing companies in the aspects of financial
accounting and management accounting. It has summarized the application
situation of production and business cost accounting at companies in some
foreign companies and business lessons for Vietnamese manufacturing
companies.


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CHAPTER 2. ACTUAL SITUATION OF PRODUCTION AND
BUSINESS COST ACCOUNTING AT STEEL COMPANIES IN
CENTRAL VIETNAM
2.1. Overview of steel companies in Central Vietnam
2.1.1. Organizational characteristics of production and business
activities at steel companies in Central Vietnam
Steel companies in Central Vietnam focus on investing for sustainable
development; at the same time commit to protect the environment and
rationally use the national resources. The author quantifies the business
types at steel companies in Central Vietnam in the following chart:

Steel manufacturing process: Currently in Vietnam, there are two
technological processes of steel manufacturing which are short (open) and
long (closed) including:
- By short manufacturing process or it is called an open manufacturing
process (electric arc furnace (EAF)) and induction furnace (IF)).

- By long manufacturing process or it is called a closed manufacturing
process (basic oxygen furnace (BOF) or steel manufacturing technology
from upstream).
2.1.2 Management organization characteristics of steel companies in
Central Vietnam
The author quantifies the organizational management structure at steel
companies in Central Vietnam in the following chart:


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2.1.3. Organizational characteristics of accounting work at steel
companies in Central Vietnam
2.1.3.1. Organizational accounting chart
The author quantifies the organizational accounting chart at steel
companies in Central Vietnam in the following chart:

2.1.3.2. Applied accounting policies
Survey results on the application of accounting policies and regimes at
steel companies in Central Vietnam: They all apply the accounting regime


13
as prescribed by the Ministry of Finance.
2.2. Actual situation of production and business cost accounting at
steel companies in Central Vietnam
2.2.1. Actual situation of production and business cost accounting in
the aspect of financial accounting at steel companies in Central Vietnam
2.2.1.1. Cost accounting principles govern the production and
business cost accounting

Through surveys, both the management work as well as the accounting
work at steel companies in Central Vietnam follow certain principles:
principle of original price, consistency, caution, importance and continuous
operation.
2.2.1.2. Determining production and business costs
The author quantifies the classification criteria of production and
business costs at steel companies in Central Vietnam in the following
chart:

2.2.1.3. Recording production and business costs
Subject of accumulating production and business costs: The author
quantifies the model of cost accumulation subject at steel companies in
Central Vietnam in the following chart:


14

Accumulation method of production and business cost accounting:
Including cost accumulation accounting of direct materials, direct labor,
general production, selling and company management.
2.2.1.4. Presenting the information on production and business
costs
The information on production and business costs at steel companies
in Central Vietnam is shown in the basic criteria: criteria of original price,
selling cost, company management cost (Report of business results) and
criteria of unfinished production and business costs (Balance sheet). At the
same time, it is explained in details in the Financial Statement.
2.2.2. Actual situation of production and business cost accounting in
the aspect of management accounting at steel companies in Central
Vietnam

2.2.2.1. Making norms of production and business costs:
The author quantifies the results of making production and business
cost norms at steel companies in Central Vietnam in the following chart:


15

2.2.2.2. Making estimates of production and business costs
The author quantifies the results of making production and business
cost estimates at steel companies in Central Vietnam in the following chart

2.2.2.3. Collecting the information on production and business costs
for management requirements
- Method of determining production and business costs: Actual cost
method is currently applied in all companies with a simple online model
(limited companies and private companies), normal cost method and the


16
standard cost method are applied at companies that have a functional
online model (for all joint stock companies).
- Management accounting report of production and business costs:
All steel companies in Central Vietnam make reports of product costs,
corresponding to the scale of 86.96% and report of part cost, accounting
for 56.52%.
2.2.2.4. Analyzing the information on production and business costs
for management requirements
The steel companies in Central Vietnam only make reports of
production cost analysis – report of product manufacturing cost analysis
and report of part manufacturing cost. However, not all companies make

these two reports.
2.3. Assessing the actual situation of production and business cost
accounting at steel companies in Central Vietnam
2.3.1. Achievements
Production and business cost accounting in the aspect of financial
accounting
- Regarding cost accounting principles govern the production and
business cost accounting: Basically comply with and ensure the
accounting principles as prescribed.
- Regarding cost identification and classification (determination of
production and business costs): The arrangement of production and
business costs at companies into items of production costs and the details
of these cost items according to the factors and its operational functions
meeting the requirements of providing information on financial accounting
on cost criteria of goods sold in business result reports, information on cost
factors in the Financial Statements.
- Regarding the record of production and business costs
+ Subject of production and business costs aggregation:
The determination of subject aggregating production and business
costs at steel companies in Central Vietnam is basically consistent with the
cost management, inspection and analysis requirements, internal
accounting requirements of each company.
+ Accounting method to aggregate production and business costs
Method of aggregating and allocating production and business


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costs: The application of methods of aggregating production and business
costs is basically consistent with the characteristics of production and
business activities of companies.

Aggregation production and business cost accounting
- Regarding accounting vouchers: The steel companies in Central
Vietnam is basically quite consistent with the situation of production and
business activities of companies.
- Regarding accounts and accounting books: Through actual
surveys, steel companies in Central Vietnam strictly comply with and well
use accounts and cost accounting as prescribed by the Ministry of Finance.
- Regarding information on production and business costs: The
information on production and business costs of steel companies in Central
Vietnam is mainly presented in three reports: Balance sheets, Business
result reports and Financial statements.
Production and business cost accounting in the aspect of management
accounting
- Regarding norms of production and business costs: The steel
companies in Central Vietnam have made norms of the items such as costs
of direct materials and general production to meet part of the cost
management work at companies, helping to better control the cost system
of companies.
- Regarding estimates of production and business costs: Through
the survey results, it is possible to make conclusions about the steel
companies in Central Vietnam, in general, they satisfy the cost information
for planning. Because the estimates of production and business costs at
these companies are static and timely support the company’s planning of
production and business activities.
- Regarding collecting information on production and business
costs for management requirements
+ Regarding the method of determining production and business
costs: Companies applying different cost determination methods will have
different levels of satisfaction with the cost information requirements but
the companies applying the standard cost method will have the highest

satisfaction level of cost information needs.
+ Regarding the production and business cost management


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accounting reporting system: In general, the production and business cost
management accounting reporting system at steel companies in Central
Vietnam has a cost reporting system basically meeting the management
requirements.
2.3.2. Limitations
Production and business cost accounting in the aspect of financial
accounting
- Recording production and business costs: The opening of a
detailed system of accounting accounts and books for detailed tracking of
subjects is still less and simple.
- Regarding the information on production and business costs:
Steel companies in Central Vietnam initially focus on setting up the
reporting system of financial and management reports such as cost reports
by job or process, business result reports by direct method (by tariff) which
have not yet been developed.
Production and business cost accounting in the aspect of management
accounting
- Regarding the identification and classification of production and
business costs: In the aspect of management accounting, these
classification methods have basically not met the requirements of
providing information on internal management.
- Regarding norms and estimates of production and business costs
+ Regarding norms of production and business costs: The norm
system is not full, some cost factors have not been quantified in terms of
both quantity and price.

+ Regarding estimates of production and business costs: The cost
estimate system at steel companies in Central Vietnam is not full and
inconsistent.
- Regarding the information collection of production and business
costs for management requirements
+ Method of determining production and business costs: The cost
determination is only conducted for the products and parts. Even companies
with a simple part structure only determine production costs for a product
group.
+ Regarding the production and business cost management


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accounting reporting system: The information on the cost management
accounting report is only presented into the items by the cost factors and
operational functions so it can not meet the requirements of cost control
and assessment of company activities.
- Regarding the information analysis of production and business
costs for management requirements: Through researching the actual
situation, the collection of production and business cost information at
steel companies in Central Vietnam has not met the requirements of the
managers. The current cost information has met the information
requirements for preparing financial statements. The biggest effect of the
information in financial statements for the company is to help the
managers evaluate the financial structure and financial prospects of the
company.
- Regarding the analysis of changes in production and business
costs between facts and estimates to enhance cost control: This analysis
content at steel companies in Central Vietnam is still simple, the cost items
have not been fully analyzed yet so the information collected from the

analysis has not met the management requirements effectively.
- Regarding the management accounting system of environmental
cost: The steel industry is one of the industries causing environmental
pollution and the costs related to environmental treatment are very high.
However, the environmental-related costs at steel companies in Central
Vietnam are not separately collected to provide information for
management but are included in the general production cost items.
2.3.3. Reasons for limitations
Objective reasons
- Because the steel industry still lacks the strict management of State
agencies in investing in this industry.
- The technological level of Vietnamese steel companies is considered
to be weak.
- Documents on accounting laws and accounting standards are not
consistent with Vietnam’s specific economic management mechanism,
etc.
Subjective reasons
- The awareness of accounting information role in management is


20
limited.
- Companies have not paid enough attention to training human
resources and improving the qualifications of accountants, etc.
- Companies have not paid enough attention to regularly updating the
changed information on financial accounting policies, accounting regimes,
etc.
- Due to the qualifications, the professional competence of some
accountants at steel companies in Central Vietnam.
CONCLUSION OF CHAPTER 2

Basically, Chapter 2 has analyzed the organizational characteristics
of production and business activities, organization of management and
accounting work that affect the production and business cost accounting at
steel companies in Central Vietnam. The thesis has analyzed and clarified
the current situation of production and business cost accounting at steel
companies in Central Vietnam in the aspect of financial accounting and
management accounting.
Through analyzing the actual situation, the thesis has clearly shown
the advantages, limitations and reasons for production and business cost
accounting at steel companies in Central Vietnam.


21
CHAPTER 3.
COMPLETION OF PRODUCTION AND BUSINESS COST
ACCOUNTING AT STEEL COMPANIES IN CENTRAL VIETNAM
3.1. Development orientations and the requirement to complete the
production and business cost accounting at steel companies in Central
Vietnam
3.1.1. Development orientations of steel companies in Central
Vietnam
3.1.2. Basic requirements for completing the production and
business cost accounting at steel companies in Central Vietnam
3.2. Completion solutions of production and business cost accounting
at steel companies in Central Vietnam
3.2.1. Completing the production and business cost accounting in the
aspect of financial accounting at steel companies in Central Vietnam
3.2.1.1. Completing the records of production and business costs
- Organizing the system of accounting accounts: Companies may
make an account ID in the form of the following table:

Account
Account
Account
Account
Account
Level 1
Level 2
Level 3
Level 4
Level 5
Costs of
Details
Details
Details
Details
direct
in each
for each
for each
for each
materials
production
product
product type product type
stage
group
according to
the tariff and
norms
- Making the accounting book system: Based on the detailed

management requirements of companies and subjects which the companies
have determined to make the detailed accounting book system to ensure
detailed tracking of each cost item and factor combined with the
application of variable and fixed costs as a basis for analysis of cost
changes; analyze costs by the determined cost collection subject in
accordance with the request to provide cost details for cost management
requirements.


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3.2.1.2. Completing the information on production and business
costs
To have the basis to perform information analysis of production and
business costs effectively, calculating the price and reporting the business
results for each product of each order, the author recommends that the steel
companies in Central Vietnam should make price by the job and production
process in order to find the fluctuations to determine the change cause and
take timely management measures. In addition, cost fluctuations can be
analyzed through price reporting and business result reports.
3.2.2. Completing the production and business cost accounting in the
aspect of financial accounting at steel companies in Central Vietnam
3.2.2.1. Completing the classification of production and business
costs
To maximize profits, an important issue for the company is cost
control. In order to apply the cost management accounting system, it is
necessary to classify the cost treatment.
3.2.2.2. Completing the norms of production and business costs
Companies need to take advantage of cost norms more consistently.
Because the cost norms will help the company determine the production
cost of 1 product unit, thereby making a basis for cost performance and

control.
3.2.2.3. Completing the estimates of production and business costs
The estimates of production and business costs at steel companies in
Central Vietnam are not made consistently. Therefore, to be able to foresee
the cost fluctuation and help the company assess the efficiency of actual
cost control when the level of activity changes, companies should make
flexible estimates for many different levels of activity.
3.2.2.4. Completing the information collection of production and
business costs for management requirements: We may set up report types
such as:
The production department has the following report types: Detailed
cost reports on direct materials, direct labor, general production, allocation
of general production costs according to the criteria, cost fluctuation
analysis reports.


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In non-production departments: Include the following types of reports:
Sales cost follow-up reports, company management cost follow-up reports.
3.2.2.5. Completing the analysis of production and business costs
for management requirements
- Analysis of break-even point: The analysis of break-even point will
show the minimum billet and steel output to offset costs, thereby make
solutions to achieve sales without losses. So, break-even analysis will show
the minimum sales level that companies need to achieve.
- Analysis and control of production and business costs: Companies
need to make the fluctuation analysis between estimates and facts of direct
material costs, direct labor costs and general production costs.
3.2.2.7. Completing the system of management accounting of
environmental costs

With the standardized cost accounting system which is completed for
steel companies in Central Vietnam as mentioned above, it meets the
requirements of cost management accounting in planning, controlling
costs, making decisions and assessing business results. However, to meet
the information needs of the managers, it is necessary to make the cost
management accounting system with the purpose of environmental
protection.
3.3. Implementation conditions of complete solutions for production
and business cost accounting at steel companies in Central Vietnam
3.3.1. For the State
3.3.2. For the companies