Activity based costing : Case study of industrial marketing division petroleum refinery plant

Abstract

The purpose of this thesis is to apply Activity Based Costing technique to evaluate and analyze the operation cost of the Industrial Marketing Division/Industrial Marketing Department in order to provide the cost information for Activity Based Management system. The activity modeling- IDEFO is selected to develop activity model. Using this technique, the major activities and their sub-activities are defined. The operation cost of the division and related functions are captured and ฝlocated to activity pools that had been listed by activity model and then allocated cost into customer. By this methodology, the cost of each activity is defined. The Activity Based Cost of Industrial Marketing Division will be provided as information for the Activity Based Management system. The Activity Base Management (ABM) will use the activities cost information to analyze for the value added activities and non-value added activities of the industrial division. The non-valued activities such as sale planning, delivery checking will be redesigned or reduced on its number of generated. So that the total operation cost of Industrial Marketing Division for marketing and sales activities are also reducing too. Being develop ABC/ABM, there would be helped organization on reducing their operation costs, exploring for the non-value added activities and terminate them