The implementation of Activity Based Costing (ABC) in Chinese refining manufacturers

Table of contents

1. Introduction 2

1.1 Research background 2 1.2 domestic and foreign research status 4 1.2.1 Activity-based costing development process 4 1.2.2 Status quo of Activity-Based Costing Development and Application in China 6 1.3 research contents 8

2. Related theories 9

2.1concept of ABC 9 2.2 rationales 10 2.3 difference between ABC and traditional costing 12 2.3.1. Different calculating targets 12 2.3.2 Different calculation 12 2.3.3. Different Finished goods costs term 13

3. Research methodology 13

3.1 case study 13 3.2 The survey method 13 3.3 Literature 14

4. Research Results 14

4.1 problems of traditional costing method in oil refining enterprise 14 4.2suggestions for Chinese enterprises’ application ABC 15

Bibliography 15

1. Introduction

1.1 Research background

With the rapid development of the national economy, enterprises’ competition is increasingly fierce; many companies are using advanced science and technology to achieve competitive advantage in the market. Market competition and technological progress are the two fundamental economic factors which generate activity-based costing. Since The beginning of 1980s of the 20th century, the activity based cost method is paid a wide range of attention; the developed countries gradually adopt it in a number of advanced enterprises, and it continuously develops in the practice.

Traditional Costing emphasizes on the accounting and control of the direct materials and direct labor and other direct costs, while for indirect costs it uses the single number standard as the basis for the allocation. In the case that products variety is single, the proportion of indirect costs is smaller, and it still can provide