The motivation of total cost management comes from three aspects: the change of world economic environment; Defects exposed by traditional cost management; The formation of modern cost management concept.

(1) Changes in the world economic environment.

Today's economic environment requires the reconstruction of cost management. The worldwide competitive pressure, the development of service industry and the progress of information and production technology have changed the nature of the economy and led to major changes in the way many enterprises operate economic business. These changes in turn promoted the development of revolutionary cost management activities.

First of all, the pressure of global competition has increased. The vigorous development of transportation and communication has enabled many manufacturers and service companies to enter the global market. No matter the size of the company, it is affected by the opportunities provided by international competition. Therefore, the objective situation requires the use of accounting information to control costs, develop productivity and estimate profitability;

The growth of service industry.

With the decline in the importance of traditional manufacturing (chimney factory), the importance of the service sector in the economy has increased. The unique characteristics of the service industry require us to expand and adopt cost management in line with the specific environment of this industry. The intensification of competition in service industry also makes managers in these industries more consciously need to use accounting information for planning, control and decision-making. With the demand for more useful information and higher productivity, the demand for cost management information in service departments will also increase;

(3) The progress of information technology.

With the wide application of computer numerical control machine tools, artificial intelligence tools and computer-aided equipment in production, many enterprises have changed from traditional labor-intensive production to capital-intensive and technology-intensive production. The proportion of direct labor cost to total cost decreased from 40% in the 1970s to 20% in the 1980s and 65,438+00% in the late 1990s. At the same time, the proportion of indirect costs is greatly increased, and the content of cost structure is more complicated, which objectively requires more flexible cost management methods to adapt to more complicated product cost calculation.