A Study on the Implementation of an Activity‐Based Costing (ABC) System in an Australian Oil and Gas Company

Abstract

This paper reports the results of a study on the implementation of an activity‐based costing (ABC) system in an Australian oil and gas company. The findings suggest that the three most important objectives of implementing an ABC system were: (1) more effective cost management, (2) better cost control, and (3) more accurate costing information. The results reveal that lack of understanding of the ABC methodology was the most important factor that impeded the implementation of the ABC system. The results further suggest that the three most important factors that contributed to the success of the ABC implementation process were: (1) project team were well organized and advised, (2) there were good information flows between users and preparers, and (3) there were sufficient resources provided. Overall, the results of this study are similar to those studies conducted in the manufacturing sectors.

Citation

Chong, V.K. and Cable, R. (2002), "A Study on the Implementation of an Activity‐Based Costing (ABC) System in an Australian Oil and Gas Company", Asian Review of Accounting, Vol. 10 No. 2, pp. 81-99. https://doi.org/10.1108/eb060759