Transformation of economic development and activity-based management

How to apply appropriate cost management mode so to obtain a sustainable competitive advantage is an important issue faced by Chinese enterprises. This paper shows the influence of transformation of economic development on enterprises´ cost management, analyzes the shortcomings of traditional costing mode; then the paper describes the advantages of activity-based management. The paper focuses on the application of activity-based management in the enterprises in the transformation period of economic development and provides the concrete steps. In the end, the paper shows the special attentions in applying activity-based management.