The Application Of Activity-Based Costing (ABC) In CQ Drilling Engineering Company

In the entire oil industry, oil drilling engineering is the most important. Petroleum drilling engineering with a focus on use of assets of scale, construction investment, construction risks and other characteristics consume a large amount of material, labor and capital. These characteristics determine the features of cost accounting and management work, outstanding performance for cost elements and the more complex, higher cost of a single well, verses other methods of cost management.This article will illustrate drilling cost Management Company as a case study. With the current method of cost management there are many disadvantages and areas in need of improvement, such as cost management simplicity, the cost of overruns during the collection period, cost allocation is not reasonable, etc., CQ drilling companies need to find a simpler, effective and accurate method of single-well cost accounting and adjustments. Based on this, this paper focuses on an Activity-Based Cost (ABC) method CQ drilling company in cost accounting and cost management, optimized methods in the existing accounting mode, and an improved cost management mode. To identify a more accurate cost-sharing method, and an accurate accounting cost of a single well. Applied to the results to improve cost management procedures, and find breakthrough points to reduce costs, design more single wells to satisfy the needs of enterprise performance, improve profits and market competitive power.This paper is divided into five parts:The first part:research background, research purpose, research significance and the expected contribution.The second part:premise of CQ drilling companies with step by step analysis of conditions of petroleum drilling engineering, drilling purpose, classification, process, cost composition and influencing factors in aspects of content, final results of the CQ drilling company cost accounting and management status. The third part:focus of this article, in combination with practical situations of CQ drilling companies, activity-based costing as the core ideological analysis of petroleum drilling engineering related resources, operations, cost drivers and cost allocation scheme, cost-accounting model set up costs, combined with single-well specific analysis.The fourth part:introduce Activity-Based Costing method to drilling engineering results applied to cost management, set up of ABC method of the single well performance evaluation methods, combined with analysis of single well cost composition and breakthrough points to reduce costs.The fifth part:ABC introduced into accounting and single well drilling to the specific requirements of technical evaluation, design of the ABC method in concrete implementation schemes of the existing financial systems, and the corresponding system requirements, analysis of the performance evaluation system for the further development of ABC methods of performance evaluation systems and corresponding reference basis.In summary, this paper introduces ABC methods to CQ drilling company cost results, proposes efficient and accurate performance evaluation of single-well methods, and implied reduction of company costs. An operation cost accounting method contrasted with the ABC method in accounting information systems at final implementation stage. An effective accounting information system enhances the working efficiency of financial personnel, and provides reliable data for all kinds of enterprise management. Implementing an ABC scheme can improve the quality of accounting information, enhance the accuracy of cost information, and help in cost analysis and cost control by providing data support for the company’s costs of projects in the works.