Jinling Petrochemical Company Refinery Cost Management Model

With the China's WTO entry, the petrochemical industry of China will face more and more completed international competition environment. The main competition methods are price and service. Especially the price is the most important and associated with production cost.This paper studies the western advanced cost management modes-Activity-based costing (ABC) and Target cost (TC). Under the conditions of modem advanced manufacturing, overhead takes larger and larger proportion in .the .total-product .cost. -But. the..traditional cost management apportions the overhead based on the unit working day or work piece. It must distort the product cost information badly, and result in the wrong management decision-making. On the contrary, the modern cost management modes apportion the overhead more accurately and provide the true cost information. It is very helpful for the managers to make the right decisions.The paper puts up a new costing mode for the refinery enterprise, combining with the refinery of JINGLING Petrochemical Corporation. Comparing to the existing cost mode-economic factor, activity-based costing can provide accurate and dependable cost information for the cost control and competitive strategy. So it enhances the power of participating international competition.Through the study of probability of enforcing the activity-based costing, it suggests that we already have the conditions to enforce the activity-based costing in the petrochemical industry of China. Government accounting and enterprise republic should keep a positive attitude and put the plan into effect as quickly as possible.