Case Study – Activity – Based Management in Shell Gabon Case Requirements 1. SG TOTAL UOC per barrel = $140‚640‚200/(120‚000 barrels/day * 365 days/year) = $3.21/barrel Barrels of oil produced is a cost driver for some of the activities in RDS‚ but not all are driven by production of oil. UOC = Total Operating Expense (OPEX) excluding exploration‚ depreciation‚ and depletion therefore there are other activities like exploration‚ new capital equipment for exploration‚ research and development
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all the activities that go on within RDS? Comment on why RDS chooses to monitor costs per barrel. The UOC per barrel for SG is $3.21. OPEX | $140‚640‚200 | 120‚000 | barrels/day | | | 365 | days/year | Total | $140‚640‚200 | 43‚800‚000 | barrels/year | Unit Operating Cost (UOC) | $3.21 | | | *UOC = (Total Operating Expense – Exploration – Depreciation & Depletion) / Barrels Produced Barrels of oils produced may be a cost driver for some activities in RDS‚ but not all activities are driven
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Shell Gabon 11/6/2014 Cost Accounting Case Study 1. The UOC is calculated by dividing the total operating cost‚ excluding exploration‚ depreciation‚ and depletion by the barrels produced. In the case of RDS not all activities can be traced directly to a barrel of oil. There are departments such as Human Resource Management and Business Management that are not directly related to this measure. It makes sense for RDS to use barrels as the primary cost driver due to the large cost of the Production
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ISSN 1940-204X Activity-Based Management in Shell Gabon* Shahid Ansari Babson College Jan Bell Babson College Background Table 1 SG’s 2000 OPEX Cost Forecast 2 During the 1990s‚ world events‚ such as Russia’s increased oil production and Asia’s economic meltdown‚ caused excess oil supply. In fact‚ by mid-2002‚ there was over 6 million barrels per day of excess production capacity. Oil prices‚ much like any other commodity prices‚ respond to supply conditions with wide price
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TOPIC: ACTIVITY-BASED MANAGEMENT INTRODUCTION Activity based management (ABM) is an approach to management that aims to maximize the value adding activities to the customers while minimizing or eliminating non-value adding activities. The objective of ABM is to improve the efficiency and effectiveness of an organization in securing its markets. It draws on activity based-costing (ABC) as its major source of information and focuses on managing activities to (1) reduce costs‚ (2) create performance
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Cost Management is a combination of philosophy‚ an attitude and a set of techniques to create more customer value and to achieve lower cost. It goes beyond historical measurements and reporting to assess the impacts of current and proposed decisions. Activity Based Management (ABM) is one of the major disciplines of cost management that focuses on the management of activities as a way to improve customer value and profit. The Basics Concept of Activity Based Management The battle to sustain
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BAYERO UNIVERSITY‚ KANO SCHOOL OF POSTGRADUATE STUDIES‚ FACULTY OF SOCIAL SCIENCES A case study of Activity Based Costing in Lagos State Healthcare By POPOOLA‚ OLUWATOYIN MUSEDIKU JOHNSON Course Facilitator: Professor Kabiru Isa Dandago Being a paper presented in the M.Sc. Accounting Programme‚ Department of Accounting‚ Bayero University‚ Kano-Nigeria December 15‚ 2009 Abstract The purpose of this study is to examine the healthcare systems‚ in particular the blood transfusion
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At a recent management meeting at Coverdrive Ltd‚ the members of the senior management team discussed the introduction of a new product to the company’s range of high quality‚ hand made cricket bats. A major agenda item was pricing. The management accountant‚ since his appointment‚ had given much thought to pricing policy and one of his concerns was that of dealing with the recovery of overhead within a full cost pricing policy. The discussion centred around the traditional method currently
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Term Strategy 8 Future Plans 9 Important Issues 10 Conclusion 11 Bibliography 12 Declaration We declare that this assignment is result of our own hard work‚ understanding and research based on activities of BOC Gases Fiji Limited and the notes received during our course. _________________ ABSTRACT BOC (FIJI) LIMITED BOC (Fiji) is a member of the Linde Group‚ a leading global gases and engineering
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2.4 Problems face in implementing Activity Based Costing During the process of implementing the ABC in one firm may face a lot of problems such as technical factor and behavioral factor. As for behavioral factor‚ the implementation of ABC may cause the employee job to be duplicated due to the differences between ABC and GAAP system that need separate operation. This may lead to the unsatisfied behavior of the employee that need to work more as the ABC is implied‚ this will also cause the decrease
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