管理会计第五版(英文版)课后题答案第四章

Chapter4

Activity-BasedCost

Systems

QUESTIONS

4-1Conventionalcostsystemsarelikelytosystematicallydistortproductcosts

becausetheybreakthelinkbetweenthecauseforthecostsandthebasisfor

assignmentofthecosttotheindividualproducts.Twofactorsthatcontribute

tosuchcostdistortionsare:(1)theuseofunit-relatedmeasurestoallocate

indirectcostsand(2)differencesinrelativeconsumptionratiosofindirect

resourcesbetweencostobjects.Unit-relatedmeasuresareusedtoallocate

supportcoststoproducts,butthedemandforactivitiesmightbedrivenby

batch-relatedandproduct-sustainingcostdrivers.Also,costdistortionstendto

begreaterwithgreaterdifferencesbetweenrelativeproportionsofindirect

resourcesusedbycostobjectsbecausetraditionalcostassignmentsbasedon

unit-relatedmeasuresdonotaccuratelyreflectthesedifferences.

4-2Conventionalcostingsystemsallocatebatch-relatedandproduct-sustaining

costsinproportiontoaunit-relatedmeasure.Inahighlyautomatedplant,costs

ofbatch-relatedandproduct-sustainingactivitiesaregreater.Allocatingthese

costsbasedonaunit-relatedmeasuredistortscosts.Activity-basedcosting

systemscorrectthedistortionbyemployingappropriatecostdriversfor

differentactivitiestoassigncoststoproducts.

4-3Yes,conventionalcostingsystemsaremorelikelytoovercosthighvolume

productsbecausebatch-relatedandproduct-sustainingcostsareassignedto

productsinproportiontothenumberofproductionunits.

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Atkinson,SolutionsManualt/aManagementAccounting,5E

4-4Activitycostdriveristheunitofmeasurementforthequantityoftheactivity

usedtoproduceindividualproductsorservices.Activitycostdriversidentify

thelinkagebetweenactivitiesandcostobjects,suchasproducts,services,and

customers.Anactivitycostdriverrateistheratioofthecostoftheresources

requiredtoprovideanactivitytothetotalquantityofthecostdriver(thatis,

thepracticalcapacityquantitymadeavailablebythoseresources).

4-5Themajorstepstodetermineactivitycostdriverratesinatraditionalactivity­

basedcostsystemare:

Step1.Identifytheactivitiesperformedbytheorganization(preparean

activitydictionary).

Step2.Determinethecostofperformingeachactivity.

Step3.Identifyacostdriverforeachactivity.

Step4.Determinethenumberofunitsofthecostdriver(practical

capacity)madeavailablebytheresourcescommittedtoeach

activity.

Step5.Divideeachactivitycostbytherelevantactivitycostdriverunitsto

obtaineachactivitycostdriverrate.

4-6Undertheframeworkofaconventionalcostsystem,costsareallocatedto

productsbasedonunit-relatedmeasuressuchasmachinehoursanddirect

laborhours.Distortioncausedbytheuseofunitrelatedmeasurestoallocate

costsiscorrectedinactivity-basedcostingsystemsbecausebatch-related

activitycostsareassignedtojobsonthebasisofbatch-relatedcostdrivers.

4-7No,thisstatementisnotcorrect.Activity-basedcostingsystemsusedifferent

costdriverstobetterlinktheactivitiesperformedtotheproducts

manufactured.Thereasontheyprovidemoreaccurateproductcostsisthat

theytakeintoaccountthedemandplacedonahierarchyofactivities(for

example,unit-level,batch-level,andproduct-level)bydifferentproducts,not

becausetheyusemorecostdrivers.Asystemthatusesmanycostdriversthat

donotreflecttheactivitycosts(suchasasystemthatreliesonlyonunit-

relatedcostdrivers)isalsolikelytodistortproductcosts.

4-8Activity-basedcostingsystemsusecostdriversthatlinktheactivities

performedtothecostobjectsthatusetheactivities.Forexample,thecost

objectsmightbeproducts,services,orcustomers.

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4-9Usingthenumberofsetupsinsteadofsetuphoursisappropriatewhenall

productsrequireapproximatelythesamenumberofsetuphoursperbatch.

4-10Managersusetheinformationonactivitycoststoidentifyopportunitiesfor

operationalimprovementsandreductionsinoperationscosts,decisionsabout

productmixandpricing,andtargetedcustomersegments.Anexampleofan

operationalchangeisrequiringminimumordersizestoeliminateshort,

unprofitableproductionruns.Anotherexampleischangingthefacilitylayout

toreducemovesofworkinprogress.Productdesignscanbechangedinorder

tomanufactureproductswithfewerpartsorcommonpartstoreducematerial

handlingsupportcosts.Finally,ifactivity-basedcostanalysisshowsthatfull­

palletshipmentsarelesscostlyperunitthanpartial-palletshipments,

customerscanbeencouragedtoreceivefull-palletshipments.Ofcourse,

customerswhoinsistonverysmallordersizesorpartial-palletshipmentscan

bechargedapricehighenoughtocovertheextracostsassociatedwithsuch

activities.

4-11Theactivitycostdriverrateshouldreflecttheunderlyingefficiencyofthe

process-thecostofresourcestohandleeachproductionorder-andthis

efficiencyismeasuredbetterbyusingthecapacityoftheresourcessupplied

(practicalcapacity)asthedenominatorwhencalculatingactivitycostdriver

rates.Thenumeratorinanactivitycostdriverratecalculationrepresentsthe

costsofsupplyingresourcecapacitytodowork.Thedenominatorshould

matchthenumeratorbyrepresentingthequantityofworktheresourcescan

perform.Unassignedcostsrepresentthecostofunusedcapacityandshouldbe

usedasfeedbacktomanagersontheirsupplyanddemanddecisions.

4-12Immediatefinancialimprovementmaynotfollowevenafterprocess

improvementsreducethedemandforindirectandsupportresources.Thisis

becausethesupportcostsareoftencommitted.Theorganizationmustactively

managetheunusedcapacitybyincreasingthevolumeofbusinessorreducing

thesupplyofunusedresources.

4-13Thetwosetsofparametersthatmustbeestimatedintime-drivenactivity-based

costingare1)theunitcostofsupplyingcapacityforeachdepartmentor

process,basedonpracticalcapacity,and2)theconsumptionofcapacity(unit

times)foreachtransactionalactivity,includingtimeequationsasneeded.

Atkinson,SolutionsManualt/aManagementAccounting,5E

4-14Time-drivenactivity-basedcostinghasanumberofadvantagesovertraditional

activity-basedcosting.Theadvantagesinclude(1)dataforthetime-driven

approacharefareasiertoobtain,validate,andupdate,(2)thetime-driven

modeliseasiertoupdatewhenoperatingconditionschanges(forexample,

changesintheactivitiesthatindirectlaborperforms),(3)thetime-driven

modeliseasiertoupdatewhencostdriverrateschange(due,forexample,to

salaryincreasesorefficiencyimprovements),and(4)thetime-drivenmodel

easilyaccommodatesdifferencesintimerequiredfortransactionsor

productionorders(usingtimeequations).

4-15Conventionalproductcostingsystemsaredesignedprimarilyforexternal

financialreportingthatrequirestrackingofmanufacturingcoststoallocate

betweencostofgoodssoldandinventories.Sellinganddistributioncostsare

notincludedincostofgoodssoldorinventories.Theirinclusionwould

requiremaintainingaparallelaccountingsystem,whichuntiltheadventof

inexpensivedataprocessing,wasconsideredtobenotcosteffective.Also,

sellinganddistributioncostsusedtobesmallrelativetoothermanufacturing

costsandtheirexclusiondidnothaveaseriousimpactonmanagerial

decisions.

4-16Customerserviceandtechnologicalinnovationhavebecomemoreimportantin

afirm'squestforacompetitiveedgeoveritsrivals.Asmoreresourcesare

usedontheseandrelatedactivities,theproportionofnon-manufacturingcosts

hasincreasedrecently.Therefore,ithasbecomemoreimportanttoassign

thesecoststoproductsformanagerialpurposes.

4-17Virtuallyallthecostsforaservicecompanyareindirectandappeartobe

fixed.Manufacturingcompaniescantraceimportantcomponentsofcosts,such

asdirectmaterialanddirectlaborcosts,toindividualproducts.Service

companieshavefewornodirectmaterialsandmanyoftheirpersonnelprovide

indirect,notdirect,supporttoproductsandcustomers.Consequently,service

companiesdonothavedirect,traceablecoststoserveasconvenientallocation

bases.

Unlikephysicalproducts,servicescannotbeinventoriedforfuturesales.

Servicecompaniesmustsupplyvirtuallyalltheirresourcesinadvanceto

providethecapacitytoperformworkforcustomersduringeachperiod,and

demandoftenfluctuates.Forsomeserviceindustries,theincreaseinspending

resultingfromanincrementaltransactionorcustomerisessentiallyzero.

Therefore,servicecompaniesmakingdecisionsaboutproductsandcustomers

basedonshort-termvariablecostsmightprovideafullrangeofallproducts

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andservicestocustomersatpricesnearzero,leadingtolittlerecoveryofthe

costsofallthecommittedresourcessuppliedinordertodeliverservicesto

customers.

Itcanbedifficulttoidentifyandmeasuretheoutputsforaservice

organization.Thevariationindemandfororganizationalresourcesismuch

morecustomer-driveninserviceorganizationsthaninmanufacturing

organizations.Aservicecompanycandetermineandcontroltheefficiencyof

itsinternalactivities,butcustomersdeterminethequantityofdemandsfor

theseoperatingactivities.Forexample,customersmayvarygreatlyinthe

numberoftransactionsandthebalancesintheircheckingaccounts.Service

companiesmustfocusoncustomercostsandcustomerprofitability;measuring

revenuesandcostsatthecustomerlevelprovidesservicecompanieswithfar

morerelevantandusefulinformationthanattheproductlevel.

Finally,acustomermayhavemultiplerelationshipswithaservicecompany.

Therefore,thecostsystemshouldprovideinformationthatsupports

determiningprofitabilityoftheentirerelationshipwiththecustomer.

4-18Individualsmayfeelvulnerablefacinguncertaintyaboutwhattheactivity­

basedcostanalysismayshow,ortheymayfeelthreatenedbythesuggestion

thattheirworkcouldbeimproved.Forexample,theanalysismightrevealthat

productsorcustomersthoughttobeveryprofitableareactuallyunprofitable,

orthatsomeprocessesareinefficient.Individualsmaybeconcernedthatthey

willthenbejudgedaspoormanagers,eventhoughtheyweremaking

decisionsthatotherswouldagreeweregooddecisionsbasedonthecost

systeminplace.

EXERCISES

4-19PotterCorporationshouldswitchtoactivity-basedcostingbecauseitscurrent

systemappearstobedistortingproductcosts,resultinginpricesofspecialty

productsthataretoolow(henceincreasingtheirmarketshare)andpricesof

simpleproductsthataretoohigh(thus,loweringtheirmarketshare).This,in

turn,leadstoloweroverallprofitabilityasPotterpushesproductsthat,in

reality,producelowprofitmarginsorevenlosemoney.

Inimplementinganactivity-basedcostingsystem(seetheresponsetoquestion

4-5),Potterwillneedtoidentifyactivitycostdriversinitsplantsuchasthe

numberofsetups,purchaseorders,andqualityinspections,andthenallocate

coststoproductsintheproportionoftheamountofactivitydemandedbyeach

product.

Atkinson,SolutionsManualt/aManagementAccounting,5E

4-20(a)Avarietyofsolutionsmaybeproposed.Thesolutionbelowaddsthe

$150,000qualityinspectioncostsperquartertothe“handleproductionruns”

activitydescribedinthechapter.

HandleSetUpSupportRunTotal

Prod.MachinesProductsMachinesExpense

Runs

Indirectlaborandhalf50%40%10%$840,000

offringebenefits

Computerexpense80%20%300,000

Machinedepreciation100%240,000

Maintenance100%120,000

Energy100%60,000

QualityInspections100%150,000

$1,710,00

0

HandleSetUpSupportRunTotal

Prod.MachinesProductsMachinesExpense

Runs

Indirectlaborandhalf$420,00$336,000$84,000$840,000

offringebenefits0

Computerexpense240,00060,000300,000

Machinedepreciation240,000240,000

Maintenance120,000120,000

Energy60,00060,000

QualityInspections150,000150,000

$810.00$336.000$144.000$420,000$1.710.00

QQ

Therevisedactivitycostof$810,000isusedtoderiveanewactivitycost

driverratefor“handleproductionruns,^^andtheproductcostsarerevised.

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HandleSetUpSupportRun

Prod.MachinesProductsMachines

Runs

ActivityExpense$810,000$336,000$144,000$420,000

ActivityCostDriverNumberofNumberofNumberofNumberof

runssetupproductsmachine

hourshours

ActivityCostDriver2,0008,000412,000

Quantity

ActivityCostDriver$405per$42per$36,000per$35perhour

Raterunhourproduct

HandleSetUpSupportRun

Prod.MachinesProductsMachines

Runs

ActivityCostDriver$405per$42per$36,000per$35perhour

Raterunhourproduct

ActivityCostDriver7002,80016,000

Quantity:Vanilla

TotalActivity$283,500$117,600$36,000$210,000

Expenses:Vanilla

ActivityCostDriver6501,56014,800

Quantity:Chocolate

TotalActivity$263,250$65,520$36,000$168,000

Expenses:Chocolate

ActivityCostDriver5002,50011,080

QuantityStrawberry

TotalActivity$202,500$105,000$36,000$37,800

Expenses:Strawberry

ActivityCostDriver1501,1401120

Quantity:Mocha-

Almond

TotalActivity$60,750$47,880$36,000$4,200

Expenses:Mocha-

Almond

Atkinson,SolutionsManualt/aManagementAccounting,5E

(b)Indirectlaborcostsarenow$150,000+$840,000=$990,000andtheindirect

laborcostperhourofworkis$990,000/20,000hours=$49.50.Thecomputer

costperhourremains$300,000/500hours=$600.The"RunMachines^^activity

costdriverrateistakenfromtheEricsonactivity-basedcostanalysisinthe

chapter.

HandleSetUpSupportRun

Prod.RunsMachinesProductsMachines

DQ*ACDR*DQ*ACDR*DQ*ACDR*ACDR*

Indirect5$247.501$49.50500$24,750

Labor:

$49.50/hr

Computer:0.2$120.0025$15.000

$600/hr

$367.50$49.50$39,750$35per

Totalperrunperpermachine

setupproducthour

hour

Quantityand

ACDR=ActivityCostDriverRate=DQx$49.50forindirectlaborcosts.

Forcomputercosts,ACDR=DQx$600.

Costareassignedtothefourflavorsasfollows:

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HandleSetUpSupportRun

Prod.RunsMachinesProductsMachines

ActivityCostDriver$367.50$49.50per$39,750$35per

Rateperrunsetuphourpermachine

producthr

ActivityCostDriver7002,80016,000

Quantity:Vanilla

TotalActivity$257,250$138,600$39,750$210,000

Expenses:Vanilla

ActivityCostDriver6501,56014,800

Quantity:Chocolate

TotalActivity$238,875$77,220$39,750$168,000

Expenses:

Chocolate

ActivityCostDriver5002,50011,080

QuantityStrawberry

TotalActivity$183,750$123,750$39,750$37,800

Expenses:

Strawberry

ActivityCostDriver1501,1401120

Quantity:Mocha-

Almond

TotalActivity$55,125$56,430$39,750$4,200

Expenses:Mocha-

Almond

Atkinson,SolutionsManualt/aManagementAccounting,5E

4-21(a)Indirectlaborcostsarenow110%x$840,000=$924,000andthe

indirectlaborcostperhourofworkis$924,000/20,000hours=$46.20.

Thecomputercostperhourremains$300,000/500hours=$600.The

“RunMachines^^activitycostdriverrateistakenfromtheEricson

activity-basedcostanalysisinthechapter.

HandleSetUpSupportRun

Prod.RunsMachinesProductsMachines

QDO*ACDR*DO*ACDR*DO*ACDR*ACDR*

Indirect5$2311$46.20500$23,100

feabor:

$46.20/hr

D

Computer:0.2$12025$15,000

$600/hr

V$351$46.20$38,100$35per

Totalperrunperpermachine

rsetupproducthour

hour

Q

uantityand

ACDR=ActivityCostDriverRate=DQx$46.20forindirectlaborcosts.

Forcomputercosts,ACDR=DQx$600.

Costareassignedtothefourflavorsasfollows:

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HandleSetUpSupportRun

Prod.RunsMachinesProductsMachines

ActivityCostDriver$351per$46.20per$38,100$35per

Raterunsetuphourpermachine

producthr

ActivityCostDriver7002,80016,000

Quantity:Vanilla

TotalActivity$245,700$129,360$38,100$210,000

Expenses:Vanilla

ActivityCostDriver6501,56014,800

Quantity:Chocolate

TotalActivity$228,150$72,072$38,100$168,000

Expenses:

Chocolate

ActivityCostDriver5002,50011,080

QuantityStrawberry

TotalActivity$175,500$115,500$38,100$37,800

Expenses:

Strawberry

ActivityCostDriver1501,1401120

Quantity:Mocha-

Almond

TotalActivity$52,650$52,668$38,100$4,200

Expenses:Mocha-

Almond

Atkinson,SolutionsManualt/aManagementAccounting,5E

Basedonthesecosts,theincomestatementisasfollows.

CHOCO­STRAW­MOCHA­

VANILLALATEBERRYALMONDTOTAL

Prod.&SalesVolume(000)50040090101000

UnitSellingPrice$4.50$4.50$4.65$4.95

Sales(000)$2,250.00$1,800.00$418.50$49.50$4,518.00

MaterialCosts(000)$750.00$600.00$140.40$16.50$1,506.90

DirectLabor(000)$300.00$240.00$54.00$6.00$600.00

ContributionMargin$1,200.00$960.00$224.10$27.00$2,411.10

40%fringeonDL$120.00$96.00$21.60$2.40$240.00

HandleProductionRuns$245.70$228.15$175.50$52.65$702.00

SetUpMachines$129.36$72.07$115.50$52.67$369.60

SupportProducts$38.10$38.10$38.10$38.10$152.40

RunMachines$210.00$168.00$37.80$4.20$420.00

TotalOH$743.16$602.32$388.50$150.02$1,884.00

GrossMargin(000)$456.84$357.68(164.40)(123.02)$527.10

GrossMai'gin(%)20.30%19.87%-39.28%-248.52%11.67%

MSDAExpenses(000)900.00

OperatingProfit/(Loss)(000)($372.90)

Thenewlossdiffersfromthepreviouslossby$84,000,whichistheincreasein

indirectlaborcosts.

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(b)Asinpart(a),indirectlaborcostperhourofworkis$924,000/20,000hours=

$46.20andthecomputercostperhouris$300,000/500hours=$600.

HandleSetUpSupportRun

Prod.RunsMachinesProductsMachines

DQ*ACDRfDQ*ACDR1DQ*ACDR士ACDR*

Indirect4$184.801$46.20500$23,100

Labor@

$46.20/hr

Computer0.2$120.0025$15.000

@

$600/hr

$304.80$46.20$38,100$35per

Totalperrunperpermachine

setupproducthour

hour

*DQ=DriverQuantityand

ACDR=ActivityCostDriverRate=DQx$46.20forindirectlaborcosts.

Forcomputercosts,ACDR=DQx$600.

Costsareassignedtothefourflavorsasfollows:

Atkinson,SolutionsManualt/aManagementAccounting,5E

HandleSetUpSupportRun

Prod.RunsMachinesProductsMachines

ActivityCostDriver$304.80$46.20per$38,100$35per

Rateperrunsetuphourpermachine

producthr

ActivityCostDriver7002,80016,000

Quantity:Vanilla

TotalActivity$213,360$129,360$38,100$210,000

Expenses:Vanilla

ActivityCostDriver6501,56014,800

Quantity:Chocolate

TotalActivity$198,120$72,072$38,100$168,000

Expenses:

Chocolate

ActivityCostDriver5002,50011,080

QuantityStrawberry

TotalActivity$152,400$115,500$38,100$37,800

Expenses:

Strawberry

ActivityCostDriver1501,1401120

Quantity:Mocha-

Almond

TotalActivity$45,720$52,668$38,100$4,200

Expenses:Mocha-

Almond

Thetotalactivity-basedcostassignedinpart(b)is$1,551,600,ascomparedto

$1,644,000assignedinpart(a).Thedifferenceisdueto2,000fewerindirectlabor

hoursusedinpart(b),andthisaccountsforthe$92,400difference(2,000hoursx

$46.20perhour),whichisthecostassociatedwithunusedindirectlaborcapacity.

Thecostoftheunusedcapacityappearsinthefollowingincomestatement,which

showsthesamelossasinpart(a).Showingthecostofunusedcapacityasaseparate

lineitemprovidesfeedbacktomanagementaboutresourcecapacitythatcouldbeput

toproductiveuse,orinsomecases,eliminated.

-no-

CHOCO­STRAW­MOCHA­

VANILLALATEBERRYALMONDTOTAL

Prod.&SalesVolume(000)50040090101000

UnitSellingPrice$4.50$4.50$4.65$4.95

Sales(000)$2,250.00$1,800.00$418.50$49.50$4,518.00

MaterialCosts(000)$750.00$600.00$140.40$16.50$1,506.90

DirectLabor(000)$300.00$240.00$54.00$6.00$600.00

ContributionMargin$1,200.00$960.00$224.10$27.00$2,411.10

40%fringeonDL$120.00$96.00$21.60$2.40$240.00

HandleProductionRuns$213.36$198.12$152.40$45.72$609.60

SetUpMachines$129.36$72.07$115.50$52.67$369.60

SupportProducts$38.10$38.10$38.10$38.10$152.40

RunMachines$210.00$168.00$37.80$4.20$420.00

TotalOH$710.82$572.29$365.40$143.09$1,791.60

GrossMargin(000)without

unusedcapcost$489.18$387.71(141.30)(116.09)$619.50

GrossMargin(%)21.74%21.54%-33.76%-234.52%13.71%

Unusedcapacitycost:

2,000ILhrsx$46.20$92.40.40

GrossMargin(000)after

deductunusedcapacitycost$527.10.10

MSDAExpenses(000)900.00

OperatingProfitZ(Loss)(000)($372.90)

Atkinson,SolutionsManualt/aManagementAccounting,5E

Monthly

Planned

EstimatedActivityCostCostDriverActivity

ActivityCostsDriversQuantityRate

ProcessNo.ofdeposits

deposits$29,630processed33,250$0.89

ProcessNo.of

withdrawals26,080withdrawals22,7501.15

processed

AnswerNo.of

inqui