会计教学课件

1、copyright 2015 pearson canada inc. 1chapter 4activity based costing2copyright 2015 pearson canada inc. objective 1develop and use departmental overhead rates to allocate indirect costs3copyright 2015 pearson canada inc. plantwide overhead rate(quick review)using one predetermined manufacturing overh

2、ead cost rate for all operationspmoh rate =total estimated manufacturing overhead costs total estimated amount of the allocation basepmoh rate =$10,000,000 625,000 dlh= $16 per dlh4copyright 2015 pearson canada inc. plantwide overhead rate(quick review)plant-wide overhead rateactual use of allocatio

3、n basemoh allocated to one unitelliptical$16 per dl hour 10 dl hours=$160treadmill$16 per dl hour 10 dl hours=$160assume that the plantwide rate we just calculated is applied to two different products:5copyright 2015 pearson canada inc. departmental overhead rates when to use departments incur diffe

4、rent amounts and types of moh different jobs or products use the department resources to a different extent why use provides more accurate estimates of overhead cost allocations6copyright 2015 pearson canada inc. departmental overhead ratesseparate predetermined manufacturingoverhead into rates for

5、each departmentmanufacturing plant with $10,000,000 of total estimated moh and 2 departmentsmachining department($4,000,000 of moh)assembly department($6,000,000 of moh)$4,000,000 departmental allocation base of 125,000 mh yields a moh rate of $32 per mh$6,000,000 departmental allocation base of 500

6、,000 dlh yields a moh rate of$12 per dlh7copyright 2015 pearson canada inc. compare departmental approach to plantwide approachdepartmentdepartmental overhead rateactual use of departmentalallocation basemoh allocated to one ellipticalmachining$32 per ml hour1 mh=$32assembly$12 per dl hour9 dlh=108d

7、epartmentdepartmental overhead rateactual use of departmental allocation basemoh allocated to one treadmillmachining$32 per dl hour4 mh=$128assembly$12 per dl hour6 dlh=72plantwide ratemoh allocationdepartmental rates moh allocationamount of cost differenceelliptical$ 160$ 140$20 overcostedtreadmill

8、$ 160$ 200$40 undercostedcopyright 2015 pearson canada inc. 8why do companies refine their cost allocation systems? leads to better understanding of cost drivers leads to better decision making leads to better estimates of product costs simple systems may lead to cost distortions who can refine thei

9、r allocation systems? manufacturing operations service companies and governmental agencies9copyright 2015 pearson canada inc. signs the old system may be distorting costscost system may need repair when:q managers dont understand costs and profitsq the cost system is outdated 10copyright 2015 pearso

10、n canada inc. objective 2develop and use activity based costing (abc) to allocate indirect costs11copyright 2015 pearson canada inc. activity based costing allocates indirect costs to production focuses on activities and costs of activities separates allocation rates for each activitymanufacturing a

11、ctivitiesmachine set-upmaterialshandlingfabricatingpartssupervisingassemblyinspectingproductspackagingproducts12copyright 2015 pearson canada inc. step 1: identify & estimate indirect costs by activityactivitymoh costs for the activitytotal cost of activitymachine set-upindirect labour to set-up

12、 machines$160,000materials handlingforklifts, gas, operators wages400,000fabricating partsmachine lease payments, electricity, repairs600,000supervising assemblyproduction engineers labour300,000inspectingtesting equipment, inspection labour340,000packagingpackaging equipment200,000$2,000,00013copyr

13、ight 2015 pearson canada inc. steps 2 - 3: compute cost allocation rate for each activityactivityallocation basetotal cost poolcost allocation ratemachine set-upnumber of set-ups$160,000$160,000 / 16,000 = $10materials handlingnumber of parts moved400,000400,000/ 800,000 = 0.50fabricating partsmachi

14、ne hours600,000600,000/ 25,000 = $24supervising assemblydirect labour hours300,000300,000 / 100,000 = $3 inspectingnumber of inspections340,000340,000 / 68,000 = $5packagingcubic feet packaged200,000200,000 / 800,000 = 0.25 $2,000,00014copyright 2015 pearson canada inc. activityactivity cost allocat

15、ion rateactual use of activity allocation base (by job)moh allocated to jobmachine set-up$10 per set-up2 set ups=$20materials handling$0.50 per part20 parts=10fabricating $24 per machine hour1 machine hour=24supervising assembly $3 per dl hour9 dl hours=27inspecting$5 per inspection3 inspections=15p

16、ackaging$0.25 per cubic foot52 cubic feet=13total $109info for product astep 4: allocate overhead to the individual jobs15copyright 2015 pearson canada inc. activityactivity cost allocation rateactual use of activity allocation base (by job)moh allocated to jobmachine set-up$10 per set-up4 set ups=$

17、40materials handling$0.50 per part26 parts=13fabricating $24 per machine hour4 machine hour=96supervising assembly $3 per dl hour6 dl hours=18inspecting$5 per inspection6 inspections=30packaging$0.25 per cubic foot60 cubic feet=15total $212info for product bstep 4: allocate overhead to the individua

18、l jobs16copyright 2015 pearson canada inc. examples of cost driversactivities:cost drivers:material purchasing# of purchase ordersmaterial handling# of partsproduction scheduling# of batchesquality inspections# of inspectionsphotocopying# of pages copiedwarranty service# of service callscopyright 20

19、15 pearson education inc., toronto, ontario 17e4-27b: abc examplestep 1: identify each activity and costs material handling$ 5,600 machine setup6,400 insertion of parts39,200 finishing96,800 total manufacturing overhead $148,00018copyright 2015 pearson canada inc. e4-27b (continued)step 2. identify

20、the allocation base for each activitys indirect costs (the primary cost driver)activitybudgeted costallocation basematerial handling$5,600machine setup6,400insertion of parts39,200finishing96,800total$148,000# of parts# of setups# finished dl hours# of partscopyright 2015 pearson canada inc. 19e4-27

21、b (continued)step 3. compute cost allocation rate for each activityactivitytotal est.costest. quant. of cost allocation base allocationrate mat. handling$5,600 2,800 parts machine setups6,400 20 setups insertion of parts39,200 2,800 parts finishing96,800 2,200 hrs$ 2.00320.0014.0044.00copyright 2015

22、 pearson canada inc. 20e4-27b (continued)step 4. allocate indirect costs to cost object (compute the manufacturing overhead cost assigned to job 420)job 420material handling250 parts$ 2.00machine setup3 setups320.00insertion of parts250 parts14.00finishing130 finishing hours44.00total $ 5003,5009605

23、,720$10,68021copyright 2015 pearson canada inc. e4-27b (continued)job 510material handling475 parts$ 2.00machine setup6 setups320.00insertion of parts475 parts14.00finishing300 finishing hours44.00total $ 9501,9206,65013,200$22,720step 4. allocate indirect costs to cost object (compute the manufactu

24、ring overhead cost assigned to job 510)22copyright 2015 pearson canada inc. cost hierarchy23copyright 2015 pearson canada inc. cost hierarchy definedunit-level activitiesincurred for every unitbatch-level activitiesincurred for every batch regardless the # of units in a batchproduct-level activities

25、incurred for each product regardless the # of units or batches producedfacility-level activitiesincurred by the plant regardless the # of products, batches or units produced24copyright 2015 pearson canada inc. classifying costs within the cost hierarchy1.each container is cut from the mold once the

26、plastic has cooled and hardened.2.patents are obtained for each new type of container mold.3.plastic resins are used as the main direct material for the containers.4.a plant manager oversees the entire manufacturing operation.5.the sales force incurs travel expenses to attend various trade shows thr

27、oughout the country to market the containers.facility-levelfacility-levelunit-levelproduct-levelunit level25copyright 2015 pearson canada inc. classifying costs within the cost hierarchy6. each container product line has a product line manager.7. the extrusion machine is calibrated for each batch of

28、 containers made.8. each type of container has its own unique molds.9. routine maintenance is performed on the extrusion machines.10. rent is paid for the building that houses the manufacturing processes.product-levelfacility-levelfacility-levelproduct-levelbatch-level26copyright 2015 pearson canada

29、 inc. objective 3understand the benefits and limitations of activity based costing and activity based management systems27copyright 2015 pearson canada inc. activity-based management (abm)using abc information to make decisions that improve profitability while satisfying customer needs28copyright 20

30、15 pearson canada inc. planning and control decisionspricing and product mix decisionscutting costs activity based management29copyright 2015 pearson canada inc. pricing and product mix decisions change the prices for products after identifying a more accurate estimate of total cost decide to market

31、 more aggressively the higher profit product shift the product mix away from less profitable products30copyright 2015 pearson canada inc. planning and control decisions uses the cost of activities to create budgets compare with actual activities to see if goals are being met better performance evalu

32、ation of managers31copyright 2015 pearson canada inc. cutting costs analyze costs in the value chain value-added activities non-value added activities value-engineering32copyright 2015 pearson canada inc. using abc outside of manufacturing merchandising & service: find the most profitable produc

33、t or service find the more profitable customer allocate operating activities as well as manufacturing related activities33copyright 2015 pearson canada inc. cost benefit testwhen do the benefits of adopting abc/abm exceed the costs? typically benefits are higher when: accurate product cost informati

34、on is essential to remain competitive opportunities for cost savings results in an increase in profits the firm is producing many different complex products that consume various levels of different activities high indirect costs. high and low volume products.34copyright 2015 pearson canada inc. sust

35、ainability and refined costing systems jobs and product lines do not drive environmental overhead equally refined costing systems allow companies to identify and separately pool overhead costs affecting the environment refined costing systems are more transparent, and can help management form a plan

36、 to reduce the companys environmental impact 35copyright 2015 pearson canada inc. costs of adopting abc generally lower when: the organization has accounting and information system expertise to develop the system information technology is available are companies glad they adopted abc? many companies

37、 say that it was worth the cost on the rise not a cure-all, helps managers understand costs better36copyright 2015 pearson canada inc. sustainability and lean thinking sustainability and lean thinking have many similarities lean thinking is inward looking, and focuses on increasing economic profits

38、“lean and green” combines lean thinking with sustainability inward and outward looking increasing economic profits preserve the planet and improve lives37copyright 2015 pearson canada inc. quick check38copyright 2015 pearson canada inc. 1. which of the following would indicate that a company should

39、consider using departmental overhead rates rather than a single plantwide overhead rate?a. each product is in each department for a different length of time.b. each department spends different amounts on manufacturing overhead.c. each department incurs different types of manufacturing overhead.d. al

40、l of the above statements are true. 39copyright 2015 pearson canada inc. 1. which of the following would indicate that a company should consider using departmental overhead rates rather than a single plantwide overhead rate?a. each product is in each department for a different length of time.b. each

41、 department spends different amounts on manufacturing overhead.c. each department incurs different types of manufacturing overhead.d. all of the above statements are true. 40copyright 2015 pearson canada inc. 2. manufacturing overhead is allocated to jobs in an abc system by using the following form

42、ula:a. activity cost allocation rate estimated amount of activity allocation base used by the jobb. activity cost allocation rate estimated amount of activity allocation base used by the jobc. activity cost allocation rate actual amount of activity allocation base used by the jobd. activity cost all

43、ocation rate actual amount of activity allocation base used by the job41copyright 2015 pearson canada inc. 2. manufacturing overhead is allocated to jobs in an abc system by using the following formula:a. activity cost allocation rate estimated amount of activity allocation base used by the jobb. ac

44、tivity cost allocation rate estimated amount of activity allocation base used by the jobc. activity cost allocation rate actual amount of activity allocation base used by the jobd. activity cost allocation rate actual amount of activity allocation base used by the job42copyright 2015 pearson canada

45、inc. 3. the legal costs associated with filing a patent for a new model of oven at an appliance manufacturer is an example of which type of activity?a. unit-level b. batch-level c. product-level d. facility-level43copyright 2015 pearson canada inc. 3. the legal costs associated with filing a patent for a new model of oven at an appliance manufacturer is an example of which type of activity?a. unit-level b. batch-level c. product-level d. facility-level44copyright 2015 pearson canada inc. 4.