The design of activity-based costing model for Guohua electric power company

With the rising conservational and environmental pressure from the government, the tightening competitive market, and the requirement for internal management improvement, generation companies (GENCO) need to promote their cost control and the activity-based costing (ABC) model is helpful in this field. This paper uses the Guohua project of ABC management as the background, and focuses on the key steps in the research of GENCO ABC model, such as the model establishment of resource pool, the model design of activity pool, the model design of cost object, and the model design of cost drivers. Also this paper analyzes the impact of GENCO features on the model design, concludes the basic design principle for each step and proposes the detail structure of the step. This paper proposes the ERP item table as the blueprint for resource pool design, according to the systematic and general principle; builds up the general electric power activity pool with clear structures and power industry features, based on EUCG international standard; establishes the two-level costing objective of generation equipment and units, to allocate the cost of equipment and units. Finally, this paper analyzes and concludes the problems revealed in the implementation of ABC/ABM in Guohua. Through the appropriate application of ABC, the maintenance of equipment and the depth and width of costing can be improved, and therefore promotes the analysis, control and forecast of cost, while providing instructional and valuable information on cost for the decision-makers.