Drilling Cost Control Model: An Integration Of Target Costing With Activity Based Costing

Target Costing (TC) Management and Activity based Costing (ABC) Management are advanced cost management models, which are both extremely popularized in china and around the world. Some Chinese Enterprises already begin to adopt the advanced cost control models following the establishment of Modern Enterprises System,however,the models haven't formed Cost Management System.The competition in Oil Industry becomes more and more intense as state company reform deeply.So at the situation, Cost Control concept & Method, which is the core of Finance Management for oil enterprise, must have innovation that suits for circumstances changes. As the key consisting part in oil engineering services, drilling cost control is very important. So it is necessary for the Drilling Cost Model that combines with TC and ABC to be researched and popularized.The thesis establishes Drilling Cost Management System (DCMS) which combines TCM and ABC Management in theory through the analysis of the same & different characters and the feasibility of TCM and ABCM. Actually,it is the process reproduction through ABCM, and puts each step into effect based on Activity Process through Target Control, that is to combine new technology considering reduction of direct cost, and is to combine process optimization and cost activity reasons considering reduction of indirect cost. At the same time, the thesis is also to expound & prove the feasibility of wide popularization.The thesis is to expound & prove the feasibility of TC and ABC combination, based on detailed analysis of Huabei Petro. with its current cost management situation. At the same time, the thesis also designs ABC Management Implementation Process under the control of TCM. It describes the Implementation Process of Drilling Cost Control Model with combination of TC and ABC in details, expounds & proves and inquires the existing problems, and at the same time, it provides some improving methods for Cost Management Model of Huabei Petro.The thesis establishes the Drilling Cost Control System based on combination of TC and ABC through the way that connects theory with practice. It conforms to the actual requirement of strengthening cost control in Oil Industry and has much reality importance and practical value, and at the same time, provides valuable basis of reference for cost control in Oil Industry in china.