Implementation of the activity-based budgeting system in Hormozgan Province Gas Company

Articles in Press

Document Type : Research Paper

Authors

1 Department of Accounting, Faculty of Economics management and accounting, University of Hormozgan, Bandar Abbas, Iran

2 Associate Prof, Department of accounting, Faculty of management economics and accounting, University of Hormozgan, Bandar Abbas, Iran

3 M.S. in Accounting, Islamic Azad University, Qeshm Branch, Qeshm, Iran.

4 3. Bachelor of Accounting, Hormozgan Province Gas Company, Bandar Abbas, Iran.

10.30473/gaa.2026.76940.1852

Abstract

Subject and Purpose:This study aimed to implement Activity-Based Budgeting (ABB) in Hormozgan Province Gas Company and compare it with the traditional budgeting system.
Research Method:The applied research employed a descriptive-analytical approach within a case study framework. Data were collected through structured interviews with managers and experts, review of financial documents, and direct observation of processes. The study identified 47 main activities and calculated separate cost drivers and absorption rates for each activity.
Research Findings:The results of this study showed that the activity-based budgeting system provides a more realistic picture of the cost structure compared to the traditional system. Specifically, general administrative expenses decreased by 58.7 percent and distribution and sales expenses by 94.8 percent, while the cost of services increased by 66.8 percent. These changes indicate a more accurate and fair allocation of costs in the new system. Also, the financial transparency created by the ABB system led to improved management decision-making and identification of low-performance activities. The comparative results of the two systems are presented in Tables 1 to 4, which clearly show the superiority of the ABB system in providing real information.
Conclusion, Orginality and its Contribution to the Knowledge: Implementing the activity-based budgeting system in Hormozgan Province Gas Company is an important step towards improving the financial system and cost management. By providing accurate and transparent information, this system allows for optimal allocation of resources and improved management decision-making.

Keywords

Main Subjects

Governmental Accounting

Articles in Press, Corrected Proof
Available Online from 17 October 2026

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History

  • Receive Date: 26 December 2025
  • Revise Date: 11 October 2026
  • Accept Date: 17 October 2026

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