管理會計 - cha課件

1、Chapter 8Activity-Based Costing: A Tool to Aid Decision MakingTraditional Costing Product Customer R&D Design Manufacturing Marketing Distribution ServiceProductProduct CostTraditional CostingTraditional CostingCost ObjectsDirect CostsIndirect CostsDirect MaterialsDirect LaborManufacturing overheadP

2、roduct CostsABCCost ObjectsActivities Direct CostsIndirect CostsManufacturingManufacturingNon-manufacturingNon-manufacturingProduct CostsActivity Based Costing (ABC) ABC is designed to provide managers with cost information for strategic and other decisions that potentially affect capacity and there

3、fore affect fixed as well as variable costs.ABC is agood supplement to our traditional cost systemI agree!Absorption, Variable Costing and ABCAbsorption costing is used for external reporting purposesVariable costing and ABC are used for internal decision making.Variable costing doesnt affect fixed

4、costsABC affects fixed costs as well as variable costs.Learning Objective 1Understand activity-based costing and how it differs from a traditional costing system.ActivityAn event that causes the consumption of overhead resources.Activity Cost PoolA “cost bucket” in which costs related to a particula

5、r activity measure are accumulated.$How Costs are Treated UnderActivityBased CostingActivity MeasureAn allocation basein an activity-basedcosting system.How Costs are Treated UnderActivityBased CostingThe term cost driver is also used to refer to an activity measure.How Costs are Treated UnderActivi

6、tyBased CostingABC differs from traditional cost accounting in three ways.ManufacturingcostsNonmanufacturingcosts ABC assigns both types of costs to products.Traditionalproduct costingABCproduct costingOverheadHow Costs are Treated UnderActivityBased Costing ABC does not assign all manufacturing cos

7、ts to products.ManufacturingcostsNonmanufacturingcostsTraditionalproduct costingABCproduct costingAllMost, butnot allSomeABC differs from traditional cost accounting in three ways.How Costs are Treated UnderActivityBased Costing Plantwide OverheadRateDepartmentalOverheadRatesActivityBasedCostingNumb

8、er of cost poolsLevel of complexity ABC uses more cost pools.ABC differs from traditional cost accounting in three ways.How Costs are Treated UnderActivityBased Costing ABC uses more cost pools.Each ABC cost pool has itsown unique measure of activity.ABC differs from traditional cost accounting in t

9、hree ways.Traditional cost systems usuallyrely on volume measures such as direct labor hours and/or machine hours to allocate all overhead costs to products.How Costs are Treated UnderActivityBased CostingTraditional cost systems rely exclusively on allocation bases that are driven by the volume of

10、production.ABC definesfive levels of activitythat largely do not relateto the volume of unitsproduced.Manufacturingcompanies typically combinetheir activities into fiveclassifications.Unit-LevelActivityBatch-Level ActivityProduct-LevelActivityCustomer-LevelActivityOrganization-sustainingActivityHow

11、Costs are Treated UnderActivityBased CostingA CaseWestern River runs river rafting trips. The company runs trips of one or two rafts, each of which carries two guides and up to 18 guests. The company provides all meals on the trip, which are prepared by the guides. Each guest is given a mug to use d

12、uring the trip and to take home at the end of the trip as a souvenir. A guest can be considered as a unit and a raft as a batch.the wages paid to the guidesthe cost of a mugThe costs of food served to guests and guidesCharacteristics of SuccessfulABC ImplementationsStrong topmanagement supportCross-

13、functionalinvolvementLink to evaluationsand rewardsClassic Brass An ABC ExampleManufacturing overhead is allocated to products usinga single plantwide overhead rate based on machine hours.ABC ModelCost ObjectsCostConsumption of ResourcesActivitiesFirst-stage AllocationSecond-stage AllocationDefine A

14、ctivities, Activity Cost Pools,and Activity MeasuresAt Classic Brass, the ABC team, selected the followingactivity cost pools and activity measures:Customer Orders - assigned all costs of resources that are consumed by taking and processing customer orders.Product Designs - assigned all costs of res

15、ources consumed by designing products.Order Size - assigned all costs of resources consumed as a consequence of the number of units produced.Customer Relations assigned all costs associated with maintaining relations with customers.Other assigned all overhead costs that are not associated with the o

16、ther cost pools.Define Activities, Activity Cost Pools,and Activity MeasuresPlease tell the activity level for each of them.Learning Objective 2Assign costs to cost pools using a first-stage allocation. Assign Overhead Coststo Activity Cost PoolsAssign Overhead Coststo Activity Cost PoolsDirect mate

17、rials, direct labor, and shipping are excludedbecause Classic Brass existing cost system can directlytrace these costs to products or customer orders.At Classic Brass the following distribution of resource consumption across activity cost pools is determined.Assign Overhead Coststo Activity Cost Poo

18、lsIndirect factory wages $500,000Percent consumed by customer orders 25%$125,000Assign Overhead Coststo Activity Cost PoolsFactory equipment depreciation $300,000Percent consumed by customer orders 20%$ 60,000Assign Overhead Coststo Activity Cost PoolsAssign Overhead Coststo Activity Cost PoolsLearn

19、ing Objective 3Compute activityrates for cost pools.Calculate Activity RatesThe ABC team determines that Classic Brass will have these total activities for each activity cost pool . . .1,000 customer orders,400 new designs,20,000 machine-hours,250 customer relations activities.Now the team can compu

20、te ABC rates for each activity by dividing the total cost in each activity cost pool by the respective quantity of the activity measureCalculate Activity RatesTracedTracedTracedActivity-Based Costing at Classic BrassDirectMaterialsDirectLaborShippingCostsOverhead CostsCost Objects:Products, Customer

21、 Orders, CustomersActivity-Based Costing at Classic BrassDirectMaterialsDirectLaborShippingCostsCost Objects:Products, Customer Orders, CustomersOrderSizeCustomerOrdersProductDesignCustomerRelationsOtherOverhead CostsFirst-Stage AllocationActivity-Based Costing at Classic BrassDirectMaterialsDirectL

22、aborShippingCostsCost Objects:Products, Customer Orders, CustomersCustomerOrdersOrderSizeCustomerRelationsOtherOverhead CostsFirst-Stage AllocationSecond-Stage Allocations$/Order$/Design$/MH$/CustomerUnallocatedProductDesignLearning Objective 4Assign costs to a cost object using a second-stage alloc

23、ation. Classic Brass InformationStandard StanchionsRequires no new design resources.30,000 units ordered with 600 separate orders.Each stanchion requires 35 minutes of machinetime for a total of 17,500 machine-hours.Custom Compass HousingRequires new design resources.400 separate orders.400 custom d

24、esigns prepared.1,250 compass housings produced, requiring 2machine-hours each for a total of 2,500 machine-hours.Assigning Overhead to ProductsAssigning Overhead to ProductsShown in Slide 18 & 23Lets take a look at how Classic Brass system works for just one of the 250 customers Windward Yachts who

25、 placed a total of three orders.OrdersTwo orders for 150 standard stanchions per order.One order for a custom compass housing.Machine-hoursThe 300 standard stanchions required 175 machine-hours.The custom compass housing required 2 machine hours.Assigning Overhead to CustomersAssigning Overhead to C

26、ustomersLearning Objective 5Use activity-based costing to compute product and customer margins.Prepare Management ReportsProduct Margin CalculationsThe first step in computing product margins is togather each products sales and direct cost data.Prepare Management ReportsProduct Margin CalculationsTh

27、e second step in computing product margins is toincorporate the previously computed activity-basedcost assignments pertaining to each product.Prepare Management ReportsProduct Margin CalculationsThe third step in computing productmargins is to deduct each productsdirect and indirect costs from sales

28、.What to doProduct Margin CalculationsThe product margins can be reconciled withthe companys net operating income as follows:Prepare Management ReportsPrepare Management ReportsCustomer Profitability Analysis The first step in computing Windward Yachts customer margin is to gather its sales and dire

29、ct cost data. Prepare Management ReportsCustomer Profitability Analysis The second step is to incorporate Windward Yachts previously computed activity-based cost assignments.Prepare Management ReportsCustomer Profitability Analysis The third step is to compute Windward Yachts customer margin ($699)

30、by deducting all its direct and indirect costs from its sales.A CaseFinding that Golden top 20%20% of a banks customers generate about 150% of its profits; At the other end of the spectrum, 30%of a banks customers drain 50% of its profits.Product Margins Computed Usingthe Traditional Cost SystemThe

31、first step in computing product margins is togather each products sales and direct cost data.Product Margins Computed Usingthe Traditional Cost SystemPlantwide manufacturingoverhead rate $1,000,000 20,000 MH= $50 per machine-hour=The second step in computing product marginsis to compute the plantwid

32、e overhead rate. Product Margins Computed Usingthe Traditional Cost SystemThe third step in computing product margins isallocate manufacturing overhead to each product.17,500 hours $50 per hour = $875,000Product Margins Computed Usingthe Traditional Cost SystemThe fourth step is to actuallycompute t

33、he product margins.The Differences Between ABCand Traditional Product CostsThe traditional costsystem overcosts thestandard stanchionsand reports a lowerproduct marginfor this product.The traditional costsystem undercosts thecustom compasshousings and reportsa higher productmargin for this product.D

34、ifferences Between ABC and Traditional Product CostsThere are three reasons why thereported product margins for the twocosting systems differ from one another.Traditional costing allocates all manufacturing overhead to products. ABC costing only assigns manufacturing overhead costs consumed by produ

35、cts to those products. Differences Between ABC and Traditional Product Costs Traditional costing allocates all manufacturing overhead costs using a volume-related allocation base. ABC costing also uses non-volume related allocation bases. There are three reasons why thereported product margins for t

36、he twocosting systems differ from one another.Differences Between ABC and Traditional Product Costs Traditional costing disregards selling and administrative expenses because they are assumed to be period expenses. ABC costing directly traces shipping costs to products and includes nonmanufacturing

37、overhead costs caused by products in the activity cost pools that are assigned to products.There are three reasons why thereported product margins for the twocosting systems differ from one another.Activity-Based Costing and External ReportingMost companies do not use ABCfor external reporting becau

38、se . . .External reports are less detailed than internal reports.It may be difficult to make changes to the companys accounting system.ABC does not conform to GAAP.Auditors may be suspect of the subjective allocation process based on interviews with employees.ABC LimitationsSubstantial resourcesrequ

39、ired to implementand maintain.Resistance tounfamiliar numbersand reports.Desire to fullyallocate all coststo products.Potentialmisinterpretation ofunfamiliar numbers.Does not conform toGAAP. Two costingsystems may be needed.ABC LimitationsA ProblemGore is a small, family-owned business. For its serv

40、ices, the company has always charged a flat fee per hundred square feet of carpet cleaned. The current fee is $22.95 per hundred square feet. However, there is some question about whether the company is actually making any money on jobs for some customersparticularly those located on more remote ran

41、ches that require considerable travel time. The owners daughter, home for the summer from college, has suggested investigating this question using activity-based costing. After some discussion, a simple system consisting of four activity cost pools seemed to be adequate. The activity cost pools and

42、their activity measures appear below:Activity Cost PoolActivity MeasureActivity for the YearCleaning carpetsSquare feet cleaned(00s)10,000hundred square feetTravel to jobsMiles driven50,000 milesJob supportNumber of jobs1,800 jobsOther (costs of idle capacity and organization-sustaining costsNoneNot applicableThe total cost of operating the company for the year is $340,000, whi