管理会计案例教材

1、Activity Based Costing:A Tool to Aid Decision Making Chapter8 The McGraw-Hill Companies, Inc., 2000Irwin/McGraw-HillActivity Based Costing (ABC)The objective of activity-based costing is to understand overhead and the profitability of products and customers.ABC is agood supplement to our traditional

2、 cost systemI agree! The McGraw-Hill Companies, Inc., 2000Irwin/McGraw-HillOverhead rates maybe based on activityat capacity.Activity Based Costing (ABC)Activity-Based CostingBoth manufacturingand nonmanufacturingcosts may be assigned toproducts.Some manufacturingcosts may be excludedfrom productcos

3、ts.There are a numberof cost pools each ofwhich is allocatedusing a uniquemeasure of activity.Allocation bases oftendiffer fromtraditional costingsystems. The McGraw-Hill Companies, Inc., 2000Irwin/McGraw-HillHow Costs are Treated Under Activity-Based CostingLevel of ComplexityOverhead Allocation Pl

4、antwide OverheadRateDepartmentalOverheadRatesActivity BasedCosting The McGraw-Hill Companies, Inc., 2000Irwin/McGraw-HillPlantwide Overhead RateCompanies tend to use as the overhead allocation base. The McGraw-Hill Companies, Inc., 2000Irwin/McGraw-HillA two stage process isnecessary because costsar

5、e allocated to departmentsand then to products.Finishing DepartmentShipping DepartmentPainting DepartmentDepartmental Overhead Rates The McGraw-Hill Companies, Inc., 2000Irwin/McGraw-HillDepartment1Department2Department3IndirectLaborIndirectMaterialsOtherOverheadDepartmental Overhead Rates The McGra

6、w-Hill Companies, Inc., 2000Irwin/McGraw-HillDepartment1Department2Department3 Products Departmental Overhead RatesIndirectLaborIndirectMaterialsOtherOverhead The McGraw-Hill Companies, Inc., 2000Irwin/McGraw-HillDepartment1Department2Department3 Products Direct Labor HoursMachineHoursRawMaterialsCo

7、stDepartmental Allocation BasesDepartmental Overhead RatesIndirectLaborIndirectMaterialsOtherOverhead The McGraw-Hill Companies, Inc., 2000Irwin/McGraw-HillDesigning an ABC SystemCost Objects(e.g., productsand customers)ActivitiesConsumptionof ResourcesCost The McGraw-Hill Companies, Inc., 2000Irwin

8、/McGraw-HillDesigning an ABC SystemIdentify and define activities and activity pools.Where possible, trace costs to activities and cost objects.Assign costs to activity cost pools.Calculate activity rates.Assign costs to cost objects.Prepare management reports. The McGraw-Hill Companies, Inc., 2000I

9、rwin/McGraw-HillIdentifying Activity to IncludeUnit-LevelActivityBatch-Level ActivityProduct-LevelActivityCustomer-LevelActivityOrganization-sustainingActivity The McGraw-Hill Companies, Inc., 2000Irwin/McGraw-HillIdentifying Activity to Include is a “bucket” in which costs are accumulated that rela

10、te to a single activity in the ABC system.$ The McGraw-Hill Companies, Inc., 2000Irwin/McGraw-HillThe Mechanics of ABCAt Classic Brass, the ultimate cost objects are:Products,Customer orders, andCustomers.One overhead cost - shipping - can be traced directly to customer orders.The companys overhead

11、costs are shown on the next slide. The McGraw-Hill Companies, Inc., 2000Irwin/McGraw-HillProduction DepartmentIndirect factory wages500,000$ Factory equipment depreciation300,000 Factory utilities120,000 Factory building lease80,000 1,000,000$ Shipping costs traced to customer orders40,000 General A

12、dministrative DepartmentAdministrative wages and salaries400,000 Office equipment depreciation50,000 Administrative building lease60,000 510,000 Marketing DepartmentMarketing wages and salaries250,000 Selling expenses50,000 300,000 Total overhead costs1,850,000$ Overhead Costs at Classic Brass(Manuf

13、acturing and NonManufacturing) The McGraw-Hill Companies, Inc., 2000Irwin/McGraw-HillActivity-Based Costing at Classic BrassDirectMaterialsDirectLaborShippingCostsOverhead CostsTraced$/DLHTracedCost Objects:Products, Customer Orders, Customers The McGraw-Hill Companies, Inc., 2000Irwin/McGraw-HillAc

14、tivity-Based Costing at Classic BrassDirectMaterialsDirectLaborShippingCostsOrderSizeCustomerOrdersProductDesignCustomerRelationsOtherOverhead CostsCost Objects:Products, Customer Orders, CustomersFirst-Stage Allocation The McGraw-Hill Companies, Inc., 2000Irwin/McGraw-HillActivity-Based Costing at

15、Classic BrassDirectMaterialsDirectLaborShippingCostsCost Objects:Products, Customer Orders, CustomersOrderSizeCustomerOrdersProductDesignCustomerRelationsOtherOverhead CostsFirst-Stage AllocationSecond-Stage Allocations$/MH$/Order$/Design$/CustomerUnallocated The McGraw-Hill Companies, Inc., 2000Irw

16、in/McGraw-HillAssigning Costs to Activity Cost Pools Customer Orders Product Design Order Size Customer Relations Other TotalProduction DepartmentIndirect factory wages25%40%20%10%5%100%Factory equipment depreciation20%0%60%0%20%100%Factory utilities0%10%50%0%40%100%Factory building lease0%0%0%0%100

17、%100%Shipping costs traced to customer orderN/AGeneral Administrative DepartmentAdministrative wages and salaries15%5%10%30%40%100%Office equipment depreciation30%0%0%25%45%100%Administrative building lease0%0%0%0%100%100%Marketing DepartmentMarketing wages and salaries20%10%0%60%10%100%Selling expe

18、nses10%0%0%70%20%100%Activity Cost PoolsManagement at Classic Brass believes overhead should be distributed as follows: The McGraw-Hill Companies, Inc., 2000Irwin/McGraw-Hill Customer Orders Product Design Order Size Customer Relations Other TotalProduction DepartmentIndirect factory wages125,000$ F

19、actory equipment depreciationFactory utilitiesFactory building leaseGeneral Administrative DepartmentAdministrative wages and salariesOffice equipment depreciationAdministrative building leaseMarketing DepartmentMarketing wages and salariesSelling expensesTotalActivity Cost PoolsAssigning Costs to A

20、ctivity Cost PoolsIndirect factory wages $500,000Percent consumed by customer orders 25%$125,000Using the total costs and percentage consumption of overhead, costs are assigned to activity pools. The McGraw-Hill Companies, Inc., 2000Irwin/McGraw-Hill Customer Orders Product Design Order Size Custome

21、r Relations Other TotalProduction DepartmentIndirect factory wages125,000$ Factory equipment depreciation60,000 Factory utilitiesFactory building leaseGeneral Administrative DepartmentAdministrative wages and salariesOffice equipment depreciationAdministrative building leaseMarketing DepartmentMarke

22、ting wages and salariesSelling expensesTotalActivity Cost PoolsAssigning Costs to Activity Cost PoolsFactory equipment depreciation $300,000Percent consumed by customer orders 20%$ 60,000Using the total costs and percentage consumption of overhead, costs are assigned to activity pools. The McGraw-Hi

23、ll Companies, Inc., 2000Irwin/McGraw-Hill Customer Orders Product Design Order Size Customer Relations Other TotalProduction DepartmentIndirect factory wages125,000$ 200,000$ 100,000$ 50,000$ 25,000$ 500,000$ Factory equipment depreciation60,000 - 180,000 - 60,000 300,000 Factory utilities- 12,000 6

24、0,000 - 48,000 120,000 Factory building lease- - - - 80,000 80,000 General Administrative DepartmentAdministrative wages and salaries60,000 20,000 40,000 120,000 160,000 400,000 Office equipment depreciation15,000 - - 12,500 22,500 50,000 Administrative building lease- - - - 60,000 60,000 Marketing

25、DepartmentMarketing wages and salaries50,000 25,000 - 150,000 25,000 250,000 Selling expenses5,000 - - 35,000 10,000 50,000 Total315,000$ 257,000$ 380,000$ 367,500$ 490,500$ 1,810,000$ Activity Cost PoolsAssigning Costs to Activity Cost PoolsUsing the total costs and percentage consumption of overhe

26、ad, costs are assigned to activity pools. The McGraw-Hill Companies, Inc., 2000Irwin/McGraw-HillComputation of Activity RatesThe ABC team has determined that Classic Brass has the following total activities for each activity cost pool . . .v1,000 customer orders,v200 new designs,v20,000 machine-hour

27、sv100 customers. The McGraw-Hill Companies, Inc., 2000Irwin/McGraw-Hill 1,000 Orders 200 Designs 20,000 machine-hours 100 Customers Other Production DepartmentIndirect factory wages125$ Factory equipment depreciationFactory utilitiesFactory building leaseGeneral Administrative DepartmentAdministrati

28、ve wages and salariesOffice equipment depreciationAdministrative building leaseMarketing DepartmentMarketing wages and salariesSelling expensesTotalActivity Cost PoolsComputation of Activity Rates Customer Orders Indirect factory wages125,000$ Number of orders1,000 Indirect factory wages/order125$ T

29、he McGraw-Hill Companies, Inc., 2000Irwin/McGraw-HillComputation of Activity Rates 1,000 Orders 200 Designs 20,000 machine-hours 100 Customers Other Production DepartmentIndirect factory wages125$ 1,000$ 5$ 500$ N/AFactory equipment depreciation60 - 9 - Factory utilities- 60 3 - Factory building lea

30、se- - - - General Administrative DepartmentAdministrative wages and salaries60 100 2 1,200 Office equipment depreciation15 - - 125 Administrative building lease- - - - Marketing DepartmentMarketing wages and salaries50 125 - 1,500 Selling expenses5 - - 350 Total315$ 1,285$ 19$ 3,675$ Activity Cost P

31、ools The McGraw-Hill Companies, Inc., 2000Irwin/McGraw-HillAssigning Costs to Cost ObjectsLets take a look at how our system works for just one customer - Windward Yachts.vWindward ordered two products - Stanchions and customer compass housings. Here are the details:Standard Stanchions (no design re

32、quired) The McGraw-Hill Companies, Inc., 2000Irwin/McGraw-HillAssigning Costs to Cost ObjectsLets take a look at how our system works for just one customer - Windward Yachts.vWindward ordered two products - Stanchions and customer compass housings. Here are the details:Custom Compass Housing (requir

33、es new design) The McGraw-Hill Companies, Inc., 2000Irwin/McGraw-Hill 2 Orders No new design 200 machine hours N/A Total Production DepartmentIndirect factory wages250$ Factory equipment depreciationFactory utilitiesFactory building leaseGeneral Administrative DepartmentAdministrative wages and salariesOffice equipment depreciationAdministrative building leaseMarketing DepartmentMarketing wages and salariesSelling expensesTotalActivity Cost PoolsAssigning Costs to Cost Objects$125 per order 2