Activity-based Costing In The Oil Refining Enterprises

Activity-Based Costing is a new costing method, which is based on the traditional costing method. According to the principles of activities consume resources and products consume activities, ABC puts the focus on the activities, so activities are the objects of accounting and management. This is an essential change according to the traditional costing method. So it has great significances both on theoretic and realism to study and promote ABC.Nowadays, with the background of rapid development of economy and marketing, competitions are everywhere. Our country's oil refining corporations, which were built and developed in the planned economy, are more and more not adapted to the development of socialism market economy. Since our country entered the WTO, the only way to survive and develop for the oil refining corporations is to advance quality and reduce cost. Recently the profit of the oil refining corporations is very low, so it is important to adopt an advanced costing method to reduce cost for the oil refining corporations.With the practicality of JZ Corporation, this paper put up a costing mode under the method of ABC. To compare with the results of traditional costing method, ABC's results are more approach to the fact and distribution of manufacturing expenses is more exactness. All of these are providing reliable evidences for cost control and competition strategy. Corporations' competition abilities are boost up.This paper studies the costing method of oil refining corporation by comparing the traditional costing method with the ABC method on both theoretic and reality. There are five parts in this paper. In the first part, it introduces the development course of ABC and the present research situation. And then, on the basis of the introduction to the theory of ABC, according to JZ Corporation's situation, it presents the traditional costing method. In the forth part, it calculates with ABC costing method and compare with the traditional method. In the end, it presents some problems in the process of promotion ABC, and it gives some suggestions. It also introduces the qualification of ABC.