初级国际会计第二章全英文课件

1、CHAPTER 2An Introduction to Cost Terms and Purposes1CHAPTER 2An Introduction to 1Basic Cost TerminologyCost sacrificed resource to achieve a specific objectiveActual Cost a cost that has occurredBudgeted Cost a predicted costCost Object anything of interest for which a cost is desired2Basic Cost Ter

2、minologyCost sBasic Cost TerminologyCost Accumulation a collection of cost data in an organized mannerCost Assignment a general term that includes gathering accumulated costs to a cost object. This includes:Tracing accumulated costs with a direct relationship to the cost object and Allocating accumu

3、lated costs with an indirect relationship to a cost object3Basic Cost TerminologyCost AccDirect and Indirect CostsDirect Costs （直接计入成本） CAN be conveniently and economically traced (tracked) to a cost objectIndirect Costs （间接计入成本） CANNOT be conveniently or economically traced (tracked) to a cost obje

4、ct. Instead of being traced, these costs are allocated to a cost object in a rational and systematic manner4Direct and Indirect CostsDirecCost ExamplesDirect Costs PartsAssembly line wagesIndirect CostsElectricityRentProperty taxesDirect SpecificIndirect - Common5Cost ExamplesDirect Costs 5Direct an

5、d Indirect CostsSeveral factors affect the classification of a cost as direct or indirect:The materiality of the cost in questionAvailable information-gathering technologyDesign of operationsContractual arrangementsThe direct/indirect classification depends on the choice of the cost object.6Direct a

6、nd Indirect CostsSeverDirect and Indirect CostsThe direct/indirect classification depends on the choice of the cost object.Example: Lee Xin Nutritious Food Ltd.Packaged Chicken Spicy Chicken & Lemon ChickenPackaged Duck Baked Duck & Pickled DuckEtcBoth chicken and duck are raw materials for the two

7、products.7Direct and Indirect CostsThe dDirect and Indirect CostsThe direct/indirect classification depends on the choice of the cost object.If spicy chicken and pickled duck are the cost objects, chicken and duck are _ cost. However, If packaged chicken and packaged duck are the cost objects, chick

8、en and duck are _ cost. Read the example about the Assembly Department Supervisors salary on Page 21.8Direct and Indirect CostsThe dCost Behavior (成本性态)Variable Costs （变动成本） changes in total in proportion to changes in the related level of activity or volumeFixed Costs （固定成本） remain unchanged in tot

9、al regardless of changes in the related level of activity or volumeCosts are fixed or variable only with respect to a specific activity or a given time period9Cost Behavior (成本性态)Variable CCost BehaviorVariable costs are constant on a per-unit basis.If a product takes 5 pounds of materials each, it

10、stays the same per unit regardless of whether one, ten, or a thousand units are producedFixed costs change inversely with the level of production. As more units are produced, the same fixed cost is spread over more and more units, reducing the cost per unit10Cost BehaviorVariable costs Cost Behavior

11、* Formulate the total and unit variable cost, and total and unit fixed cost respectively based on the Cost Theory that you have learned in Microeconomics.11Cost Behavior* Formulate the tCost Behavior SummarizedTotal DollarsCost per UnitVariable CostsChange in proportion with outputMore output = More

12、 costUnchanged in relation to outputFixed CostsUnchanged in relation to outputChange inversely with outputMore output = lower cost per unitTotal DollarsCost per UnitVariable CostsChange in proportion with outputMore output means More costUnchanged in relation to outputFixed CostsUnchanged in relatio

13、n to outputChange inversely with outputMore output means lower cost per unit12Cost Behavior SummarizedTotal Total Costs and Unit CostsA unit cost (also called an average cost) is computed by dividing some amount of cost total by some number of units.The units may be expressed in various ways:Hours w

14、orkedPackages deliveredBicycles assembled13Total Costs and Unit CostsA unTotal Costs and Unit CostsWhat is the unit cost (leasing and handlebars) when Metairie Bicycles assembles 1,000 bicycles?Total fixed cost $94,500 + Total variable cost $52,000 = $146,500$146,500 /1,000 = $146.5014Total Costs an

15、d Unit CostsWhatTotal Costs and Unit CostsTotal costs ($000) $146.5 $ 94.5 0 1,000 Volume15Total Costs and Unit CostsTotaUse Unit Costs CautiouslyAssume that Metairie Bicycles management uses a unit cost of $146.50 (leasing and handlebars).Management is budgeting costs for different levels of produc

16、tion.16Use Unit Costs CautiouslyAssumUse Unit Costs CautiouslyWhat is their budgeted cost for an estimated production of 600 bicycles?600 * $146.50 = $87,900What is their budgeted cost for an estimated production of 3,500 bicycles?3,500 * $146.50 = $512,75017Use Unit Costs CautiouslyWhat Use Unit Co

17、sts CautiouslyWhat should the budgeted cost be for an estimated production of 600 bicycles?Total fixed cost$ 94,500 Total variable cost ($52 *600) = 31,200 Total$125,700$125,700 /600 = $209.50Using a cost of $146.50 per unit would underestimate actual total costs if output is below 1,000 units.18Use

18、 Unit Costs CautiouslyWhat Use Unit Costs CautiouslyWhat should the budgeted cost be for an estimated production of 3,500 bicycles?Total fixed cost $ 94,500 Total variable cost (52 *3,500) = 182,000 Total$276,500$276,500 / 3,500 = $79.0019Use Unit Costs CautiouslyWhat Use Unit Costs CautiouslyUsing

19、a cost of $146.50 per unit instead of $79.00 would overestimate actual total costs if output is above 1,000 units.For decision making, managers should think in terms of total costs rather than unit costs.20Use Unit Costs CautiouslyUsingA Cost CaveatUnit costs should be used cautiously. Since unit co

20、sts change with a different level of output or volume, it may be more prudent to base decisions on a total dollar basis.What is your view on this problem?21A Cost CaveatUnit costs shouldRelationships of Types of CostsDirectIndirectVariableFixed22Relationships of Types of CostOther Cost ConceptsCost

21、Driver a variable that causally affects costs over a given time span (Explained in CH5)Relevant Range the band of normal activity level (or volume) in which there is a specific relationship between the level of activity (or volume) and a given cost (Explained in CH 10)For example, fixed costs are fi

22、xed only within the relevant range. 23Other Cost ConceptsCost DriverDifferent Types of FirmsManufacturing-sector companies create and sell their own productsMerchandising-sector companies product resellersService-sector companies24Different Types of FirmsManufaTypes of InventoriesDirect Materials re

23、sources instock and available for useWork-in-Process (or progress) products started but not yet completed. Often abbreviated as WIPFinished Goods products completed and ready for sale25Types of InventoriesDirect MatTypes of Product CostsDirect MaterialsDirect LaborIndirect Manufacturing factory cost

24、s that are not traceable to the product. Also known as Manufacturing Overhead costs or Factory Overhead costs26Types of Product CostsDirect MDistinctions Between CostsInventoriable Costs product manufacturing costs. These costs are capitalized as assets (inventory) until they are sold and transferre

25、d to Cost of Goods SoldPeriod Costs have no future value and are expensed as incurred27Distinctions Between CostsInveCost FlowsThe Cost of Goods Manufactured and the Cost of Goods Sold section of the income statement are accounting representations of the actual flow of costs through a production sys

26、tem.Note the importance of inventory accounts in the following accounting reports, and in the cost flow chart28Cost FlowsThe Cost of Goods MaCategories of InventoryGeneral formula: Beginning inventory Input ( purchase, manufacture, etc) - Ending inventory Cost of transferred (sold, consumed, etc)OR

27、Cost of inventory items available for transfer- Ending inventory Cost of transferred (sold, consumed, etc)29Categories of InventoryGeneralCategories of InventoryConcrete steps:1. Direct materials inventory :Beginning direct materials inventory Purchases of direct materials Ending direct materials in

28、ventory Direct materials usedOR:Cost of direct materials available for useEnding direct materials inventory Direct materials used30Categories of InventoryConcretCategories of Inventory2. Work-in-process inventory :Beginning work-in-process inventory Total Manufacturing costs (DM used +DL+MO)- Ending

29、 work-in-process inventory Cost of goods manufacturedOR:Total manufacturing cost account forEnding work in process Cost of goods manufactured31Categories of Inventory2. WorkCategories of Inventory3. Finished goods inventory : Beginning finished goods inventory Cost of goods manufactured Ending finis

30、hed goods inventory Cost of goods soldOR:Cost of goods available for saleEnding finished goods inventory Cost of goods sold32Categories of Inventory3. FiniProblem for Self-Study1. Demonstration of Computing InventoriesDM Inventory: $40k + $460k $50k = $500k - $50k = $450kW-I-P Inventory : $10k + ($4

31、50k+$300k+$214k) $14k = $974k - $14k = $960kF.G. $100k + $960k $150k = $1060k 150k = $910k33Problem for Self-Study1. DemonProblem for Self-Study2. Demonstration of Computing unit costsUnit of DM cost: $450k / 900k = $0.5Unit plant-leasing cost : $54k / 900k = $0.063. Demonstration of total costs:Budgeted total DM cost: $0.51000k = $500kBudgeted total plant-leasing cost :P47 $5400034Problem for Self-Study