A Study On The Application Of Activity-Based Costing In JH Drilling Company

With the space of deepening reform in market-oriented economy being accelerated and the competition among enterprises at home and abroad getting intense,the pressure on the survival and development of China's oil companies is also increasing.In recent years,the continuous low price in the international oil market indicates the depression of the oil industry.In the face of drastic shrinkage of profits,oil companies must inevitably reduce costs and improve efficiency in the process of oil or gas exploration and exploitation.JH Drilling Company,which provides specialized oil drilling technology services,must improve its cost management level and establish its own advantages in market competition in the face of the new situation.Activity-based costing(ABC),as a scientific method of cost management,has been widely used and practiced in most enterprises since proposed,and has achieved good application results.However,compared with other industries,the application of ABC in the oil drilling industry is still very limited.In this paper,ABC was successfully introduced into the accounting of JH Drilling Company and obtained more accurate cost information of single well.The operation improvement and budget improvement proposed based on this,would provide a new perspective of cost management for the company.In the application research,this paper mainly adopted field survey,comparative analysis and etc.Combing the process characteristics of drilling construction,the present situation of production and cost management of JH Drilling Company was deeply analyzed.Based on the confirmation of operations,division of operation centers and analysis of cost drivers,a set of ABC calculation plan which was suitable for the company was designed and implemented on SZ08 drilling well,and the feasibility and scientificity of the plan were also tested.At the same time,this article proved that the ABC method is more advanced than the company's current costing method through statistical analysis.Finally,this paper proposes safeguard measures in the implementation process of the ABC.This study has the characteristics of the oil drilling industry and hopes to provide a constructive reference for other domestic drilling companies and other industries in cost accounting and cost control.