The author admits to having only taken basic accounting courses, and thus is still a beginner in the field of management accounting. Currently, the author is building an accounting system for a company, with the core confusion being: how to reasonably allocate design costs into the final selling price of products.

Based on existing knowledge, the author observes that traditional functional-based costing seems to be applicable only to the accumulation of manufacturing costs, namely direct labor, direct materials, and manufacturing overhead. The design phase does not fall within the scope of manufacturing overhead, so under this costing framework, design costs may be omitted and not effectively reflected.

Based on this, the author speculates that it may be necessary to turn to activity-based costing to solve the problem. Activity-based costing uses activities as the objects of cost accumulation, allowing for more precise tracking of resource consumption, thereby potentially allocating the resources consumed by design activities accurately to related products or services. At the end of the article, the author raises the question: is this line of thinking directionally correct?

From a professional perspective, the author's judgment is basically in line with the development logic of cost accounting. Traditional functional-based costing allocates overhead costs using single drivers such as output volume or machine hours, making it difficult to reasonably accumulate costs for non-output-driven activities like design. Activity-based costing, on the other hand, identifies specific activities such as design, development, and testing, and selects appropriate cost drivers (e.g., design hours, project complexity), thereby more accurately reflecting the causal relationship between design costs and products.

Therefore, shifting to activity-based costing is indeed a feasible path to solving the design cost accounting problem. However, it should be noted that implementing activity-based costing requires the enterprise to have relatively well-established activity process mapping and cost driver data collection capabilities, and the initial investment may be high. For small and medium-sized enterprises, a simplified version of activity-based costing may also be considered, or combining it with target costing to embed cost constraints at the design stage, thereby controlling the impact of design costs on final pricing at the source.

In summary, design costs should not be ignored, and the choice of their costing method directly affects the reasonableness of product pricing and the accuracy of profitability analysis. The author's proposal to transition from functional-based costing to activity-based costing aligns with the development trend of modern cost management and is worthy of further practical application and validation.