Activity-based Budgeting Theory And Method Study

Resource limit of company make it difficult to get more profit with less devotion. Budget is one of managerial control tools that can incorporate the key elements of enterprise management into one system. Scientific budget can carry out, control and coordinate future production and operating activities of enterprise effectively, drive entire business administration level thereby. Budget is a kind of modern managerial mechanism widely applied in western countries. Traditional budget, which focuses on products and financial target, can not adapt to fierce market competition and the need of improving enterprise management efficiency. We cry for the innovation on budgeting concept and method.With change of management environment, management concept is tending to operation and flow. It is essential to put the idea of "activity" into budget to closely contact enterprise strategy and operation management. It'll be beneficial to realize strategic objective and to optimize activity flow. Nowadays, Activity-Based Budgeting (ABB) has been studied extensively abroad, though it is underway in China. In order to generalize ABB in China, the article was developed to make a detailed study on ABB's compilation.The article introduces the background, fundamental theory of ABB; on basis of compare between ABB and traditional budget, lists the advantages of ABB. Re-creates the general ABB progress according to features of oil production crew and brings forward "two-dimensional ABB". Takes main branches of oil production crew as example, explains the application of ABB; After evaluating the application with grey synthesized evaluate model, the article analyzes feasibilities and necessities of applying ABB in oil production crew. Finally, makes countermeasure study on carrying out ABB.