Research On Cost Budget Management Of D Oil Production Plant Based On Activity-Based Costing

Following the speedy advance of the economy and the increasing progress of technology,China’s oil companies want to stay alive and grow in a violently competitive environment and gain profits,not only to have advanced production technology,strong financial support,but also need to implement scientific cost budget management,the implementation of cost budget management work on the rational configuration of company materials and the effective control of production costs has an important role.Oil enterprises as the core of China’s economic growth,have faced increasing pressure on production and operation in recent years,on the one hand,the conflict between supply and demand caused by the change in international crude oil prices and the growth in domestic requirements for oil resources;on the other hand,China’s main oil fields have gradually reached the medium to late phase of exploitation after decades of development,the integrated rate of decline is rising,and in the absence of the discovery of new oil deposits,crude oil production is gradually declining and production costs continue to rise.The majority of enterprises in the industry are still using traditional methods for cost budget management,which cannot show the direct correlation between resources and costs and cannot provide managers with comprehensive and reliable information when making major decisions,and are obviously no longer fit for development.As an advanced cost accounting method and significant cost management tool,the theoretical research results at domestic and overseas are relatively mature and extensively used in many industries in China.This paper takes the D oil production plant as the object of research,analyze the current condition of management and put into effect status of the cost budget in D oil production plant and to identify the problems in the current cost budget management;use activity-based costing methodology in the cost budget management of D oil production plant,combining theoretical and empirical research,divide the operation centers according to the operation process,analyze the cost drivers according to the operation centers,refine the costs,and regression analysis using four years data from D oil production plant to build a cost estimation model for each operation center.The model is used as the foundation for implementing a cost budget built on an activity-based costing methodology,using the data of D oil production plant in 2020.In order to make the activity-based costing methodology work better in the cost budget management of D oil production plant,a number of safeguards are proposed to be established in each major department.By introducing the activity-based costing method into the D oil production plant,the cost budget management can be completed and its accuracy greatly increased,thus reaching the purpose of cutting costs and increasing benefit,and offer a foundation for the production decision of the D oil production plant.