会计学基础英文教学课件

1、Lesson 13 Managerial Accounting: Concepts and PrinciplesTask Team ofFUNDAMENTAL ACCOUNTINGSchool of Business, Sun Yat-sen University第1页，共54页。OutlineWhat is managerial accounting?Comparison between managerial accounting and financial accountingCost classifications in different ways Flow of manufactur

2、ing activitiesJob order cost accounting systems and process cost accounting systemsCost allocation2第2页，共54页。IntroductionThe previous 12 chapters focus on the financial accounting topicsPlease summarize the basic points of financial accountingUsers/ Time focus/ Emphasis/ Importance/ Subject focus/ Re

3、quirementsThinkingIs the information provided by financial accounting enough for an enterprise to conduct its operation and management?If not, how to satisfy this demand for the internal used information?Have you ever heard “managerial accounting”?3第3页，共54页。What is Managerial Accounting?An activity

4、that provides financial and nonfinancial information to managers and other internal decision makersIs quite important to planning, control, and decision making activities4第4页，共54页。The Environment of Managerial Accounting5第5页，共54页。Managerial Accounting and Financial Accounting6第6页，共54页。Cost Classific

5、ationsCosts can be classified by:RelevanceBehaviourControllabilityTraceabilityFunction7第7页，共54页。Costs Classification by RelevanceRelevantIf costs influence a decisionCosts that are applicable to a particular decision.Costs that should have a bearing on which alternative a manager selects.Costs that

6、are avoidable.Future costs that differ between alternatives.IrrelevantIf costs do not influence a decision8第8页，共54页。Costs Classification by RelevanceSunk CostsAll costs incurred in the past that cannot be changed by any decision made now or in the future.should not be considered in decisions.Irrelev

7、antExample: You bought an automobile that cost $30,000 two years ago. The $30,000 cost is sunk because whether you drive it, park it, trade it, or sell it, you cannot change the $30,000 cost.9第9页，共54页。Costs Classification by RelevanceOut-of-pocket costsrequire future outlays of cashassociated with a

8、 particular decisionrelevant for future decisionsExample: Considering the decision to take a vacation or stay at home, if you choose a vacation, you will only have travel costs (out-of-pocket costs). 10第10页，共54页。Costs Classification by RelevanceOpportunity CostsThe potential benefit that is given up

9、 when one alternative is selected over another.Example: If you were not attending college or university, you could be earning $25,000 per year. Your opportunity cost of attending college or university for one year is $25,000.11第11页，共54页。Costs Classification by BehaviorCost behavior refers tohow a co

10、st will react to changes in the level of business activity.Fixed costs do not change when activity changes.Variable costs change in proportion to changes in the volume of activity12第12页，共54页。Costs Classification by Behavior13Total fixed costs remain unchangedwhen activity changes within a relevant r

11、ange.Fixed costs per unit decline as activity increases.Volume of ActivityFixed costs per unitVolume of ActivityTotal fixed costs第13页，共54页。Costs Classification by Behaviour14Total variable costs change when activity changes.Variable costs per unit do not change as activity increases. Volume of activ

12、ityTotal variable costsVolume of activityVariable costs per unit第14页，共54页。Costs Classification by BehaviorMixed costscontain a combination of fixed and variable costs.15Variable Sales CommissionsSales Total CompensationTotal mixed costFixed Monthly salary第15页，共54页。Costs Classification by BehaviourSt

13、ep-Wise Costsremain fixed over limited ranges of volumes but increase by a lump sum when volume increases beyond maximum amounts.Example: additional production supervisors must be added when another shift is added.16Supervisory SalariesProduction Volume第16页，共54页。Costs Classification by Controllabili

14、tyControllable vs. not controllabledepends upon the employees responsibilities.Example: A lower level manager may have control over overtime costs but not over the purchase of high-cost machinery.17第17页，共54页。Costs Classification by TraceabilityManagement often traces costs to cost objects To obtain

15、a better measure of their total costCost objects include ProductsServicesDepartmentsDivisionsCustomer groups18第18页，共54页。Costs Classification by TraceabilityTraceable costs are classified asDirect costscan be conveniently traced to a unit of product or other cost objective.Examples: salaries of produ

16、ction workers, salary of maintenance department employees.Indirect costsmust be allocated to a unit of product or other cost objective.Examples: factory rent, factory light and heat, factory accounting costs.19第19页，共54页。Costs Classification by FunctionManufacturing Costsare necessary and integral to

17、 the production of finished goods.Examples: direct labour, direct materials, and manufacturing overhead.Non-Manufacturing Costsare not integral to the manufacture of finished goods.Examples: selling and administrative expenses.20第20页，共54页。Costs Classification by Function21ManufacturingCostsDirectMat

18、erialDirectLabourManufacturingOverhead第21页，共54页。Costs Classification by FunctionDirect materialsMaterials that are clearly and easily identified with a particular product.Example: Steel used to manufacture an automobileDirect labourLabour costs that are clearly traceable to, or readily identifiable

19、with, the finished product.Example: Wages paid to an automobile assemblyworker.22第22页，共54页。Costs Classification by FunctionManufacturing overheadAll manufacturing costs except direct material and direct labour.Manufacturing costs that cannot be traced directly to specific units produced.Examples: In

20、direct labour maintenanceIndirect material cleaning suppliesFactory utility costsSupervisory costs23第23页，共54页。Costs Classification by Function24Manufacturing costs are oftencombined as follows:第24页，共54页。Costs Classification by FunctionNon-Manufacturing costs (period costs) are expenses not charged t

21、o the product.Selling CostsCosts incurred to obtain customer orders and to deliver finished goods to customers advertising and shipping.Administrative CostsNon-manufacturing costs of staff support and administrative functions accounting, data processing, personnel, research and development.25第25页，共5

22、4页。DiscussionsABC company manufactures a portable radio designed for mounting on the wall of the bathroom. The following list represents some of the different types of costs incurred in the manufacture of these radios:The plant managers salary.The cost of heating the plant.The cost of heating execut

23、ive offices.The cost of printed circuit boards used in the radios.Salaries and commissions of company salespersons.26第26页，共54页。DiscussionsDepreciation on office equipment used in the executive offices.Depreciation on production equipment used in plant.Wages of janitorial personnel who clean the plan

24、t.The cost of insurance on the plant building.The cost of electricity to light the plant.The cost of electricity to power plant equipment.The cost of maintaining and repairing equipment in the plant.The cost of printing promotional materials for trade shows.The cost of solder used in assembling the

25、radios.The cost of telephone service for the executive offices.27第27页，共54页。DiscussionsRequired:Classify each of the items above as product cost or period costs.28第28页，共54页。Discussions: the answer1Product6Period11Product2Product7Product12Product3Period8Product13Period4Product9Product14Product5Period1

26、0Product15Period29第29页，共54页。Flow of Manufacturing Activities30Raw MaterialsBeginning InventoryRaw MaterialsPurchasesGoods in ProcessBeginning InventoryFinished GoodsBeginning InventoryRaw Materials UsedDirect Labour UsedMaterials Activity(raw materials)Financial ReportsRaw MaterialsEnding Inv.(balan

27、ce sheet)Production Activity(goods in process)Goods in ProcessEnding Inv.(balance sheet)Finished GoodsEnding Inv.(balance sheet)Cost of Goods Sold (income statement)Marketing Activity(finished goods)Goods ManufacturedFactory OverheadUsed第30页，共54页。Job Order Cost Accounting SystemsJob Order Cost Accou

28、nting SystemsThe production of products in response to special orders. quite flexible in the number of products they can produce.Jobs involving the production of more than one unit of product are called job lots.31第31页，共54页。Job Order Cost Accounting Systems32 Goods in ProcessCost of GoodsSoldLabourM

29、aterialsIndirectIndirectFinishedGoodsFactoryOverheadDirectDirectAllocateCompletedDelivered第32页，共54页。Job Order Cost Accounting Systems33DirectMaterialsCost per unit for Job No. 1DirectLabourFactoryOverhead Job No. 1Finished GoodsJob No. 2Finished GoodsCost per unit for Job No. 2第33页，共54页。Process Cost

30、 Accounting SystemsProcess Cost Accounting Systems Used for production of small, identical, low- cost items.Mass produced in automated continuous production process.Costs cannot be directly traced to each unit of product.34第34页，共54页。Process Cost Accounting Systems35DirectMaterialsFinishedGoodsDirect

31、LabourFactoryOverhead Process 1Process 2Cost per equivalent unit for Process 1Cost per equivalent unit for Process 2Total cost per equivalent unit第35页，共54页。Unit cost To determine the cost of goods transferred from department to department and to finished goods, we need to calculate unit cost.Unit co

32、st is computed by dividing the accumulated costs by the number of equivalent units produced in the period. 36Cost perequivalent unit=Product costs for the periodEquivalent units for the periodProcess Cost Accounting Systems第36页，共54页。Costs are accumulated for a period of time by process or department

33、. Equivalent units is a concept expressing a number of partially completed units as a smaller number of fully completed units.Example: Three one-third full pitchers are equivalent to one full pitcher.Equivalent units may be different for material and labour and overhead at different stages of a proc

34、ess.37Process Cost Accounting Systems第37页，共54页。Comparing Job Order and Process ProductionSimilaritiesSame objectiveto determine the cost of productsSame inventory accountsraw materials, goods in process, and finished goodsSame overhead assignment methodpredetermined rate times actual activity38第38页，

35、共54页。Comparing Job Order and Process ProductionJob Order SystemsCustom ordersHeterogeneous productsLow output volumeHigh flexibilityLow to medium standardizationProcess SystemsRepetitive productionHomogeneous offeringsHigh output volumeLow product flexibilityHigh standardization39Differences第39页，共54

36、页。Cost AllocationPlant-wide Overhead RateTwo-stage Cost AllocationActivity-based Costing40Methods of Overhead Cost AllocationLowHighComplexity第40页，共54页。Cost AllocationPlant-wide Overhead RateA single plant-wide overhead rate is relatively easy to usebut may result in inaccurate product costs41第41页，共

37、54页。Cost Allocation 42Two-stage Cost AllocationMore accurate method than plant-wideStage 1: Allocate service department costs to production departments. Service department costs are assigned to operating (or production) departments.Stage 2: Allocate production department costs to cost objects. Costs

38、 accumulated within operating (or production) departments are assigned to cost objects.第42页，共54页。Cost Allocation43第43页，共54页。Cost AllocationActivity-based CostingAttempts to better allocate costs to the desired cost objects by focusing on activities consumed by the cost objects.Many activities within

39、 a department drive overhead costs.Products require activities.Activities consume resources.44第44页，共54页。Cost Allocation45Overhead Actual Rate ActivityRate = Estimated overhead costs in activity cost pool Estimated number of activity units Allocate overhead cost:Activity-based Costing: ProceduresIden

40、tify activities that consume resources.Assign costs to a cost pool for each activity.Identify cost drivers associated with each activity.Compute overhead rate for each cost pool.第45页，共54页。Cost AllocationActivity-based Costing: Identifying Cost DriversMost cost drivers are related to either volume or

41、 complexity of production.Examples: purchasing, invoicing, quality inspection, product design.Three factors in choosing a cost driver:Causal relationshipBenefits receivedReasonableness.46第46页，共54页。Cost AllocationCostCost DriverMaterials purchasingNumber of purchase ordersMaterials handlingNumber of

42、materials requisitionsPersonnelNumber of employeesEquipment amortizationNumber of products produced or hours of useQuality inspectionNumber of units inspectedIndirect labour in setting up equipmentNumber of setups required47Activity-based Costing: Cost and Cost Driver第47页，共54页。Cost AllocationActivit

43、y-based Costing: BenefitsMore detailed measures of costsBetter understanding of activitiesMore accurate product costs for . . . Pricing decisionsProduct elimination decisionsManaging activities that cause costsBenefits should always be compared with costs of implementation48第48页，共54页。SummaryManageri

44、al accounting is quite important to planning, control, and decision making activities.Managerial accounting and financial accounting are different in users, time focus, requirements, etc. Costs can be classified by relevance, behaviour, controllability, traceability, and function.Flow of manufacturi

45、ng activities.Similarities and differences between job order and process cost accounting systemsThe methods of cost allocation: plant-wide overhead rate, two stage cost allocation, activity-based costing49第49页，共54页。Case StudyABC Company acquired its factory building about 25 years ago. For a number of years, the company has rented out a small,