activity-basedcostingandothercostmanagementtools：基于作業(yè)的成本和其他成本管理工具的活動

1、Activity-Based Costing and Other Cost Management Tools,Chapter 18,1,Learning Objectives,2,Develop activity-based costs (ABC),1,3,Activity-Based Costing,More accurate method to attach costs to productsRefines the way in

2、direct costs are allocated to productionFocuses on costs incurred by each production activityActivity costs become the building blocks for allocating costs to products and servicesEach activity has its own cost driver

3、,4,Activity-based costing Divides production process into activities Assigns costs to products based on how much the product USES those activitiesCost driversActivity that drives the cost to being accumulatedExample

4、sQuality inspections–number of inspectionsWarranty Services–number of service callsShipping–number of pounds,5,Activity-Based Costing,Overview of Traditional and ABC Systems,Traditional systemUses a plant-wide manuf

5、acturing overhead allocation rate,6,Overview of Traditional and ABC Systems,ABC systemUses a separate allocation rate for each activity,7,Developing an Activity-Based Costing System,8,,ABC System,9,ABC System Results,U

6、nder traditional system:The gross profit for specialty DVD is $20 per DVD—five times as high as the $4 gross profit for the Excel DVDManagement may decide to produce more specialty DVDsUnder ABC:Costs are more accura

7、te,10,S18-3: Computing indirect manufacturing costs per unit,Day, Corp. is considering the use of activity-based costing. The following information is provided for the production of two product lines:Day p

8、lans to produce 400 units of Product A and 375 units of Product B.1. Compute the ABC indirect manufacturing cost per unit for each product.,11,The indirect manufacturing cost for Product A is:The indirect manufacturin

9、g cost for Product B is:,12,S18-3: Computing indirect manufacturing costs per unit,$81.50,$342.40,Setup = $106,000 / 200 = $530.00 per set-upMaintenance = $55,000 / 4000 = $13.75 per machine hour,Use activity-base

10、d management (ABM) to achieve target costs,2,13,Activity-Based Management,Uses ABC to make decisions Increase profits while meeting customer needsTypes of decisions:Pricing and product mixProvides a more accurate cos

11、t of productsDetermines the profitability of productsCutting cost,14,Cost Comparison—ABC vs. Traditional Allocation,15,,,Loss versus Profit,Value Engineering,Reevaluating activities to reduce costsRequires cross-funct

12、ional teamsMarketers—identify customer needsEngineers—design more efficient productsAccountants—estimate costs Setting sales prices based on target pricesTargeting what customers are willing to pay,16,Target Pricing

13、 Versus Cost-Based Pricing,Cost-based: Full cost+ Desired profit Sales PriceTarget based: Target price- Desired profit Target Cost,17,Full-Product Costs,Consider all production costs:Direct materials

14、Direct laborAllocated manufacturing overhead Plus all nonmanufacturing costs (operating expenses): Administrative Selling expenses To determine target costs and target profits.,18,Target CostFull CostAssembl

15、e team to:Cut costs, given current production processRedesign the production process to further cut costs,19,Full-Product Cost Comparison,Recomputing Activity Costs After a Value Engineering Study,Company decides to re

16、design setup to reduce the setup cost per batchEstimated total cost saving is $160,000Number of batches stay the same,20,ABC Manufacturing Overhead Costs After Value Engineering Study,Revised Cost,21,S18-5: Using ABC

17、 to compute product costs per unit,Accel, Corp., makes two products: C and D. The following data have been summarized:Indirect manufacturing cost information includes the following:The company plans to manu

18、facture 150 units of each product.1. Calculate the product cost per unit for Products C and D using activity-based costing.,22,23,S18-5: Using ABC to compute product costs per unit,S18-11: Using ABC to achiev

19、e target profit,In Short Exercise 18-5, Accel Corp. desires a 25% target profit after covering all costs.1. Considering the total costs assigned to the Products C and D in S18-5, what would Accel have to charge the cu

20、stomer to achieve that profit?,24,Total costs divided by (100% - target profit) =$1,492 ÷ 0.75 = $ 1,989.33Total costs divided by (100% - target profit) =$3,170 ÷ 0.75 = $ 4,226.67,Describe a just-in-t

21、ime (JIT) production system, and record its transactions,3,25,Just-in-Time Systems,Materials purchased and goods completed “just in time” for deliveryDeliveries are small and frequentSuppliers must guarantee a defect r

22、ate close to zeroFinished goods inventories are kept to a minimal amountReduces company’s cost to store and insure inventoryMinimizes investment the company has in its inventories Lowers risk of the inventory becomin

23、g obsolete or unsalable,26,Just-in-Time Work Cells,Production completed in work cellsArea where resources are readily availableEmployees work in a team without supervisionGoods completed in small batches that are insp

24、ected for qualityAs completed products move out, suppliers deliver more materialsTraditional systemsProduction moves to various departmentsWork must be moved, between departments wasting time and money,27,Just-in-Tim

25、e Systems,28,JIT Issues,Lost sales if materials do not arrive on time or if the materials are of poor-qualityStrong relations with vendors of quality materials essentialSome JIT companies have small inventories of crit

26、ical materials,29,Just-in-Time Costing,Also called “backflush costing”Starts with completed products and then assigns manufacturing costs to units sold and inventory,30,Smart Touch’s JIT Costing Accounts,JIT does not us

27、e a separate Work in process inventory account Only two inventory accounts:Raw and in-process inventoryFinished goods inventory,31,S18-12: Just-in-time characteristics,32,Consider the following characteristics of eit

28、her a JIT production system or a traditional production system.Products are produced in large batches.Large stocks of finished goods protect against lost sales if customer demand is higher than expected.Suppliers ma

29、ke frequent deliveries of small quantities of raw materials.Employees do a variety of jobs, including maintenance and setups as well as operating machines.1. Indicate whether each is characteristic of a JIT producti

30、on system or a traditional production system.,Traditional,Traditional,JIT,JIT,S18-12: Just-in-time characteristics,33,Consider the following characteristics of either a JIT production system or a traditional production s

31、ystem.Machines are grouped into self-contained production cells or production lines.Machines are grouped according to function. For example, all cutting machines are located in one area.The final operation in the pr

32、oduction sequence “pulls” parts from the preceding operation.Each employee is responsible for inspecting his or her own work.Management works with suppliers to ensure defect-free raw materials.,JIT,Traditional,JIT,J

33、IT,JIT,Use the four types of quality costs to make decisions,4,34,Total Quality Management (TQM),JIT more vulnerable to production shutdownsCritical element–defect free direct materialsSolution Monitor activities to i

34、mprove quality and eliminate defects and wasteTotal Quality Management (TQM)Goal of continuous improvementWell-designed products reduce inspections, rework, and warranty claimsDesign and build quality into the produc

35、tResearch & development investments can generate savings in marketing and customer service,35,The Four Types of Quality Costs,Prevention costs—spent to avoid poor-quality goods or servicesAppraisal costs—spent to d

36、etect poor-quality goods or servicesInternal failure costs—incurred when the company detects and corrects poor-quality goods or services before delivery to customersExternal failure costs—spent after the company delive

37、rs poor-quality goods or services,36,The Four Types of Quality Costs,Prevention costs occur in the R&D stage of the value chainAppraisal and internal failure costs occur in productionExternal failure occurs in cust

38、omer service or results from lost sales due to an unhappy customer Prevention much cheaper than external failureDeciding whether to adopt a new quality program involves comparing costs versus benefits,37,Deciding Whet

39、her to Adopt a New Quality Program,How to decide:Classify each cost into one of the four categoriesTotal the estimated cost per categoryTotal estimated cost reductionsDecide whether to undertake or notCosts versus b

40、enefitsQuality costs can be hard to measure:Measure in nonfinancial termsNumber of customer complaints Volume of incoming customer-service phone calls,38,39,The Four Types of Quality Costs,S18-14: Matching cost-of-

41、quality examples to categories,Sammy, Inc. manufactures motor scooters. Consider each of the following examples of quality costs.1. Preventive maintenance on machinery.2. Direct materials, direct labor, and manufac

42、turing overhead costs incurred to rework a defective scooter that is detected in-house through inspection.3. Lost profits from lost sales if company’s reputation was hurt because customers previously purchased a poor-q

43、uality scooter.4. Costs of inspecting raw materials, such as chassis and wheels.1. Indicate which of the following quality cost categories each example represents.● P Prevention costs ● A Appraisal costs● IF Int

44、ernal failure costs ● EF External failure costs,40,P,IF,EF,A,S18-14: Matching cost-of-quality examples to categories,Sammy, Inc., manufactures motor scooters. Consider each of the following examples of quality cost

45、s.5. Working with suppliers to achieve on-time delivery of defect-free raw materials.6. Cost of warranty repairs on a scooter that malfunctions at customer’s location.7. Costs of testing durability of vinyl.8. Cos

46、t to re-inspect reworked scooters.1. Indicate which of the following quality cost categories each example represents.● P Prevention costs ● A Appraisal costs● IF Internal failure costs ● EF External failure costs,4

47、1,P,EF,A,IF,Chapter 18 Summary of the chapter,Activity-based costing (ABC) focuses on activities. The costs of those activities become the building blocks for measuring (allocating) the costs of products and services. Th

48、e total production process and the related costs are divided among the various production activities. A cost driver for the activity is identified, and a rate per activity is calculated. The costs are then allocated to

49、individual products based on the amount of products’ USE of each activity.,42,Chapter 18 Summary,Activity-based management (ABM) uses activity-based costs to make decisions that increase profits while meeting customer ne

50、eds. Most companies adopt ABC to get better product costs for pricing and product-mix decisions. However, they often benefit more by cutting costs. Target pricing takes the sales price and subtracts desired profit to det

51、ermine the target cost of manufacturing.,43,Chapter 18 Summary,ABC and value engineering work together to re-evaluate activities with the goal of reducing manufacturing overhead costs to meet the target cost. By reducing

52、 costs, companies can maintain desired profit levels.Just-in-time (JIT) systems streamline manufacturing and accounting by developing relationships with suppliers, resulting in no need for the company to maintain large

53、supplies of raw materials on hand. Defect-free raw materials arrive JIT to the work cell for production.,44,Chapter 18 Summary,Because of the more efficient production process, the accounting is streamlined to match it.

54、Only two inventory accounts need to be kept—Raw and in-process inventory and Finished goods inventory. Labor and overhead are tracked in a temporary account—Conversion costs—where they are allocated to products as they a

55、re completed.The four types of quality related costs are prevention, appraisal, internal failure, and external failure costs. Quality improvement programs that reduce internal and external failure costs by more than the

56、 increased cost to prevent or appraise the product are smart total quality management decisions.,45,46,47,Copyright,All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or tra