责任中心和财务管理

责任中心和财务管理2024/3/11责任中心和财务管理LearningObjective1 Describetheformandnatureofvarianceanalysisandapplyitsbasicinsights.责任中心和财务管理VariancesWhatarevariances?Variancesaredifferencesbetweenactualandestimatedcosts.Varianceanalysisisanecessarysteptounderstandwhyadifferenceoccurred.责任中心和财务管理First-LevelVariancesThefirst-levelvarianceforacostitemisthedifferencebetweentheactualandmasterbudgetcosts.Variancesare“favorable”iftheactualcostsarelessthanestimatedcosts.Variancesare“unfavorable”iftheactualcostsexceedsestimatedcosts.责任中心和财务管理First-LevelVariancesCanningCellularServices(000) Master Actual

Budget

Costs

DifferenceDirectMaterial–WelcomePackage 25,000 29,700 4,700DirectLabor–SalesStaff 12,500 14,850 2,350–TechnicalStaff 10,000 10,890 890SupportCost–DataProcessing 3,000 3,960 960–SystemActivation 45,000

42,900

–2,100TotalCustomer-RelatedCosts 95,500 102,300 6,800责任中心和财务管理DecomposingVariancesWhatareflexiblebudgets?Flexiblebudgetsrecastcosttargetsintheplannedormasterbudgettoreflecttheactuallevelofproduction.Thisallowscomparisonsofactualresultstotargetsbasedontheachievedlevelofproduction.责任中心和财务管理DecomposingVariancesWhatareplanningvariances?Theyreflecttheeffectofthevolumechangebetweenthemasterbudgetandactualactivitylevelachieved.Whatareflexiblebudgetvariances?Theyshowthedifferencesbetweentheflexiblebudgetandtheactualresults.责任中心和财务管理DecomposingVariances

MasterBudget–FlexibleBudget=PlanningVarianceFlexibleBudget–ActualResults=FlexibleBudgetVariancePlanningvariancesandflexiblebudgetvariancesarecalledsecondaryvariances.责任中心和财务管理DecomposingVariancesWhatisthedirectmaterialefficiencyorusagevariance?Itisactualquantityusedattargetorstandardpricelesstheflexiblebudgetallowanceattheplannedortargetprice.UsageVariance=(AQ–SQ)×SPWhatisthedirectmaterialpricevariance?PriceVariance=(AP–SP)×AQ责任中心和财务管理DecomposingVariancesWhatistheefficiencyorusagevariancefordirectlaborcosts?EfficiencyVariance=(AH–SH)×SRWhatistheratevariancefordirectlaborcosts?RateVariance=(AR–SR)×AHSupportcostscanalsobeanalyzedindetail.责任中心和财务管理DecomposingVariancesSupportcostscanreflectflexibleorcapacity-relatedcosts.Thequantityofcapacity-relatedcostsmaynotchangefromperiodtoperiod,butthespendingonthemmayfluctuate.Whatareflexiblesupportcosts?Theyreflectoperationsthatareproportionaltothevolumeofactivity.责任中心和财务管理DecomposingVariances Master Planning Flexible

Budget

Variance

BudgetDirectMaterial–WelcomePackage 25,000 2,500 27,500DirectLabor–SalesStaff 12,500 1,250 13,750–TechnicalStaff 10,000 1,000 11,000SupportCost–DataProcessing 3,000 300 3,300–SystemActivation 45,000

4,500 49,500TotalCustomer-RelatedCosts 95,500 9,550 105,050CanningCellularServices(000)责任中心和财务管理DecomposingVariances Flexible Actual

BudgetVariance

ResultsDirectMaterial–WelcomePackage 2,200 29,700DirectLabor–SalesStaff 1,100 14,850–TechnicalStaff –110 10,890SupportCost–DataProcessing 660 3,960–SystemActivation –6,600 42,900TotalCustomer-RelatedCosts –2,750 102,300CanningCellularServices(000)责任中心和财务管理DecomposingVariancesThefollowinginformationrelatestoCanningCellularService:Theactualnumberofnewcustomerswere1,100,000.DirectMaterialsSQ:1AQ:1SP:$25AP:$27DirectLaborSalesStaffSH:.50AH:.45SR:$25AR:$30责任中心和财务管理DecomposingVariancesDirectLaborTechnicalStaffSH:.25AH:.22SR:$40AR:$45SupportCostDataProcessingSH:.20AH:.24SR:$15AR:$15SupportCostSystemActivationSH:.15AH:.12SR:$300AR:$325责任中心和财务管理DecomposingVariancesMaterialsefficiencyvariance=0Materialspricevariance:($25SP–$27AP)×1,100,000=$2,200,000UFlexiblebudgetvariance=$2,200,000USalesstaffefficiencyvariance:(550,000SH–495,000AH)×$25=$1,375,000F责任中心和财务管理DecomposingVariancesSalesstaffratevariance:($25SR–$30AR)×495,000=$2,475,000UFlexiblebudgetvariance=$1,100,000UTechnicalstaffefficiencyvariance:(275,000SH–242,000AH)×$40=$1,320,000F责任中心和财务管理DecomposingVariancesTechnicalstaffratevariance:($40SR–$4AR)×242,000=$1,210,000UFlexiblebudgetvariance=$110,000F

Supportcostdataprocessingefficiency:variance(220,000SH–264,000AH)×$15=$660,000URatevariance=0Flexiblebudgetvariance=$660,000U责任中心和财务管理DecomposingVariancesSupportcostsystemactivationefficiencyvariance:(165,000SH–132,000AH)×$300=$9,900,000FSupportcostsystemactivationratevariance($300SR–$325AR)×132,000=$3,300,000UFlexiblebudgetvariance=$6,600,000F责任中心和财务管理DecomposingVariancesMasterBudgetFlexibleBudgetActualResultsPlanningVarianceFlexibleBudgetVarianceTotalVariance责任中心和财务管理DecomposingVariancesUsageVarianceFlexibleBudgetVariance

ActualQuantity×StandardPriceStandardQuantity×StandardPriceActualQuantity×ActualPricePriceVariance责任中心和财务管理DecomposingVariancesSecondLevelVariancesPlanningvariancesFlexiblebudgetvariancesFirstLevelVariancesDifferencebetweentheactualandmasterbudgetcostsThirdLevelVariancesUseandpricevariances责任中心和财务管理LearningObjective2 Showwhyorganizationsuseresponsibilitycenters.责任中心和财务管理DecentralizationWhatarecentralizedorganizations?Organizationswhichreservemostofthedecision-makingpowerforseniorexecutives.Centralizationworkseffectivelyinorganizationswithstableenvironments.责任中心和财务管理DecentralizationWhataredecentralizedorganizations?Organizationswhichdelegateagooddealofthedecision-makingauthoritytolower-levelmanagers.Decentralizedorganizationsareeffectiveinenvironmentsrequiringquickresponsestochange.责任中心和财务管理DecentralizationThreeconditionsarenecessaryforeffectivedecentralization:Employeesmustbegiven,andaccept,theauthorityandresponsibilitytomakedecisions.责任中心和财务管理DecentralizationEmployeesmusthavethetrainingandskillstheyneedtoacceptthedecisionmakingresponsibility.Theorganizationmusthaveasysteminplacethatguidesandcoordinatestheactivitiesofdecentralizeddecisionmakers.责任中心和财务管理ControllingOperationsThemajorpurposeofdecentralizationistogivedecisionmakerstheresponsibilitytomakeoperatingdecisions.Thiscreatesaneedforoperationscontrol.Whatisthefocusofoperationscontrol?Itfocusesonfindingthebestoperatingdecisions.责任中心和财务管理ControllingOperationsWhatisthefocusoffinancialcontrol?Itfocusesonanoverallassessmentofhowwelloperationscontrolisworkingtoimprovefinancialperformance.责任中心和财务管理LearningObjective3 Recognizethecommonformsofresponsibilitycenters.责任中心和财务管理ResponsibilityCentersWhatisaresponsibilitycenter?Itisanorganizationunitforwhichamanagerismaderesponsible.Thecenter’smanagerandsupervisorestablishspecificandmeasurablegoalsfortheresponsibilitycenter.Thegoalsshouldpromotethelong-terminterestoftheorganization.责任中心和财务管理ResponsibilityCentersResponsibilitycentersareclassifiedintofourtypes:CostcentersRevenuecentersProfitcentersInvestmentcenters责任中心和财务管理ResponsibilityCentersWhatisacostcenter?Itisaresponsibilitycenterwhoseemployeescontrolcostsbutdonotcontrolitsrevenuesorinvestmentlevel.责任中心和财务管理ResponsibilityCentersWhatisarevenuecenter?Itisaresponsibilitycenterwhosememberscontrolrevenuesbutdonotcontrolthecostoftheproductorservicetheysellorthelevelofinvestmentintheresponsibilitycenter.责任中心和财务管理ResponsibilityCentersWhatisaprofitcenter?Itisaresponsibilitycenterwhosemanagerandotheremployeescontrolboththerevenuesandthecostsoftheproductorservicetheysellordeliver.责任中心和财务管理ResponsibilityCentersWhatisaninvestmentcenter?Itisaresponsibilitycenterwhosemanagerandotheremployeescontroltherevenues,costs,andthelevelofinvestmentintheresponsibilitycenter.责任中心和财务管理LearningObjective4 Identifytheissuestoconsiderandbasictoolstouseinassessingtheperformanceofaresponsibilitycenter.责任中心和财务管理EvaluatingResponsibilityCentersUnderlyingtheaccountingclassificationsofresponsibilitycentersistheconceptofcontrollability.Thecontrollabilityprincipleassertsthatpeopleshouldonlybeheldaccountableforresultsthattheycancontrol.Itisoftendifficulttoapplythecontrollabilityprinciple.责任中心和财务管理EvaluatingResponsibilityCentersWhataresomeproblemsassociatedwithcontrollability?jointlyearnedrevenuesand/orjointlyincurredcostsintricate,andoftenarbitrary,accountingprocedures责任中心和财务管理LearningObjective5 Assesstheissuesandproblemscreatedbyrevenueandcostinteractionsinevaluatingtheperformanceofanorganizationunit.责任中心和财务管理UsingSegmentMarginReportsWhatisasegmentmargin?Itisthelevelofcontrollableprofitreportedbyanorganizationalunitorproductline.责任中心和财务管理UsingSegmentMarginReportsRevenue $950,000 $1,250,000 $2,200,000VariableCosts 750,000

950,000

1,700,000ContributionMargin $200,000 $300,000 $500,000OtherCosts 75,000

60,000

135,000SegmentMargin $125,000 $240,000 $365,000AllocatedCosts 70,000

80,000

150,000Income $55,000 $160,000 $215,000UnallocatedCosts 300,000OrganizationProfit ($85,000)NewCarSalesUsedCarSalesTotal责任中心和财务管理UsingSegmentMarginReportsWhattypeofproblemcanoccurwhenorganizationsevaluateresponsibilitycentersasprofitcenters?identifyingresponsibilityforthecontrolofsalesandcosts责任中心和财务管理UsingSegmentMarginReportsOrganizationsusetwodifferentapproachestoevaluatesegmentmarginnumbers:PastperformanceIsperformancethisperiodreasonable,givenpastexperience?ComparableorganizationsHowdoesperformancecomparetosimilarorganizations?责任中心和财务管理UsingSegmentMarginReportsWhataresomelimitationsofsegmentmarginreporting?Marginscanbehighlyaggregatedsummaries.Somesegmentreportscontainarbitrary,orsoft,numbers.Revenuefiguresoftenreflectassumptionsandallocationsthatcanbemisleading.责任中心和财务管理UsingSegmentMarginReportsBecauseoftheselimitations,interpretingsegmentmarginsshouldbedonecarefully.Othercriticalsuccessfactorsshouldbeusedaswelltoassessperformance.责任中心和财务管理LearningObjective6 Identifythetransfer-pricingalternativesavailabletoorganizationsandthecriteriaforchoosingatransferpricingalternative.责任中心和财务管理TransferPricingWhatistransferpricing?Itisasetoftoolsandmethodsusedtoattributerevenuesearnedbytheorganizationtoorganizationsub-units.责任中心和财务管理TransferPricingTransferpricingcanbeveryarbitrary,especiallyifthereisahighdegreeofinteractionamongtheresponsibilitycenters.责任中心和财务管理TransferPricingInterrelationshipsBodyShopDepartmentServiceDepartmentLeasingDepartmentUsedCarDepartmentNewCarDepartmentNewCarPreparationRepairsRepairsNewCarPreparationUsedCarsUsedCarsUsedCars责任中心和财务管理ApproachestoTransferPricingTherearefourapproachestotransferpricing:Market-BasedCost-BasedNegotiatedAdministered责任中心和财务管理ApproachestoTransferPricingMarket-BasedTransferPricingIfagoodexternalmarketexistsforthetransferredproductorservice,thenmarketpricesarethemostappropriatebasisforpricing.Unfortunately,thesemarketswithwell-definedpricesseldomexist.责任中心和财务管理ApproachestoTransferPricingCost-Based

TransferPricesVariablecostplusamarkupFullcostFullcostplusamarkup责任中心和财务管理ApproachestoTransferPricingWhataresomeconcernsaboutcost-basedtransferprices?Cost-basedtransferpricesdonotprovidetheappropriateeconomicguidancewhenoperationsarecapacityconstrained.Theydonotfocusontheintentofthesystem,whichistoallowcalculationofunitincomes.责任中心和财务管理ApproachestoTransferPricingEconomistsarguethatonlymarginalcosttransferpricesareoptimal.Ifthetransferpriceishigherthanthemarginalcost…thesupplyingunitwantstosellmorethantheoptimalquantity,andthepurchasingunitwantstobuyfewerthantheoptimalquantity.责任中心和财务管理ApproachestoTransferPricingNegotiated

TransferPricesSupplyingandreceivingresponsibilitycentersnegotiateprices.Pricesreflectbothnegotiatingskillsandeconomicconsiderations.Optimaltransferpriceisthethe

netrealizablevalue

ofthelastunitsuppliedforallunitssupplied.责任中心和财务管理ApproachestoTransferPricingNegotiated

TransferPricesReflecttheaccountabilityandcontrollabilityprinciplesunderlyingresponsibilitycentersCaneasilyleadtodecisionsthatdonotprovidethegreatesteconomicbenefits责任中心和财务管理ApproachestoTransferPricingAdministered

TransferPricesPricessetbyarule,policy,oranarbitratorEasytoadministerArbitraryTendtoviolatethespiritoftheresponsibilityapproach责任中心和财务管理LearningObjective7 Usereturnoninvestmentandeconomicvalueaddedasfinancialcontroltools.责任中心和财务管理EfficiencyandProductivityElementsofROIROI=OperatingIncome÷InvestmentROI=OperatingIncome

×

SalesSalesInvestmentROI=ReturnonSales×AssetTurnover=Efficiency×Productivity责任中心和财务管理EfficiencyandProductivityElementsofROIWhatisefficiency?Itisameasureofanorganization’sabilitytocontrolcosts