abc成本分析法（英文版）.ppt

1,Topic 6 Activity-Based Costing,MAA 703 Management Accounting,天马行空官方博客：/tmxk_docin ；QQ:1318241189；QQ群：175569632,2,Evolution of ABC,Conventional costing systems use a two-stage allocation process: 1. service department costs are allocated to production departments. 2. production department overhead costs are allocated to products using a volume-based predetermined overhead rate.,3,Product costs dont make sense,Problem: There may be no relationship between the overhead application base and the way that different products cause overhead costs The result: High-volume simple products are over- costed and over-priced Low-volume complex products are under-costed and under-priced,4,Plantwide Overhead Rates,Companies have tended to use direct labour as the overhead application base. However direct labour is now a relatively minor part of total manufacturing cost. Many tasks that used to be done by hand are now done by automated equipment.,5,A two stage process is necessary because costs are allocated to departments and then to products.,Departmental Overhead Rates,6,Department 1,Department 2,Department 3,Cost pools,Indirect Labor,Indirect Materials,Other Overhead,Stage One: Costs assigned to pools,Departmental Overhead Rates,7,Department 1,Department 2,Department 3,Cost pools,Stage One: Costs assigned to pools,Products,Stage Two: Costs applied to products,Departmental Overhead Rates,Indirect Labor,Indirect Materials,Other Overhead,8,Department 1,Department 2,Department 3,Cost pools,Stage One: Costs assigned to pools,Products,Stage Two: Costs applied to products,Direct Labour Hours,Machine Hours,Raw Materials Cost,Departmental Allocation Bases,Departmental Overhead Rates,Indirect Labor,Indirect Materials,Other Overhead,9,Cost Distortions caused by 2-stage allocations,There is a no link between the cause of support activity costs and the basis for assigning these costs to products Why? 1. Allocations are based on unit or volume related measures. 2. Different products consume different amounts of support activities.,10,Questionable profit margins,To compete in the marketplace, some companies have had to cut the prices of high volume popular items. But They have been able to achieve high mark-ups on low volume specialty products.,11,Erosion of company profits,Price cuts produce increased sales in units but decreased total revenue High mark-ups on specialty products didnt offset the fall in profit margins of high volume products,12,Causes of problems,Increased product diversity changing cost structures use of volume-based cost drivers Have resulted in: distorted product costs,13,Solution: Activity Based Costing,ABC uses cost drivers that directly link activities performed to products made. cost drivers are selected which measure the average demand placed on each activity by each product. activity cost pools are assigned to products in proportion to the way that they consume each activity.,14,Solution: Activity Based Costing,ACTIVITIES CONSUME RESOURCES PRODUCTS CONSUME ACTIVITIES Activities are used to link resource costs to products,15,Activity Based Costing (ABC),The objective of activity-based costing is to understand the causes of overhead costs and to identify the real profitability of products and customers.,ABC is a good supplement to our traditional cost system,I agree!,16,Overhead rates may be based on activity at capacity.,Activity Based Costing (ABC),Activity-Based Costing,Both manufacturing and nonmanufacturing costs may be assigned to products.,Some manufacturing costs may be excluded from product costs.,There are a number of cost pools, each of which is allocated using a unique measure of activity.,Allocation bases often differ from traditional costing systems.,17,How Costs are Treated Under Activity-Based Costing,Level of Complexity,Overhead Allocation,Plantwide Overhead Rate,Departmental Overhead Rates,Activity Based Costing,18,Activity-based costing,is a way of measuring both the cost of cost objects and the performance of activities can help solve problems such as distorted product costs poor cost control the form of ABC adopted depends on the problems that need to be addressed,19,Designing an ABC System,Cost Objects (e.g., products and customers),Activities,Consumption of Resources,Cost,20,21,Identifying and Defining Activities,An ACTIVITY is a part of the production process for which management wants a separate reporting of costs.,Unit-Level Activities,Batch-Level Activities,Product-sustaining Activities,Facility-sustaining Activities,22,Output Unit-Level Costs.,are resources sacrificed on activities performed on each individual unit of product or service e.g. Energy used by machines Machine depreciation or repairs The Key Question: Does the amount of the activity cost pool increase with the number of units produced?,23,Batch-Level Costs.,are resources sacrificed on activities that are related to a batch of units rather than to each individual unit of product or service. Set-up activity costs may be driven by set-up hours. This will depend on the number set-ups carried out i.e. on the number of batches produced and the time each set-up takes.,24,Product-Sustaining.,(or service-sustaining) costs are resources sacrificed on activities undertaken to support individual products or services. Design costs may be driven by the time spent by engineers designing the product itself and planning how it will be made.,25,Facility-Sustaining Costs.,are resources sacrificed on activities that cannot be traced to individual products or services but which support the organization as a whole. General administration rent building security CEOs salary,26,Different forms of ABC,Simple approach - includes manufacturing overhead only ABC system for all indirect costs - includes manufacturing and non-manufacturing costs Comprehensive system - includes all product-related costs, except direct material,27,The Mechanics of ABC,Classic Brass Ltd makes finely machined brass fittings for a variety of applications. For this company, the ultimate cost objects are: Products, Customer orders, and Customers. One overhead cost - shipping - can be traced directly to customer orders. The companys activity cost pools are shown on the next slide.,28,Step 1: Identify and Define Activities and Activity Cost Pools,At Classic Brass, the ABC team, selected the following activity cost pools and activity measures:,29,Step 1: Identify and Define Activities and Activity Cost Pools,Customer Orders - assigned all costs of resources that are consumed by taking and processing customer orders. Product Designs - assigned all costs of resources consumed by designing products. Order Size - assigned all costs of resources consumed as a consequence of the number of units produced. Customer Relations assigned all costs associated with maintaining relations with customers. Other assigned all overhead costs that are not associated with the other cost pools.,30,Step 2: Whenever Possible, Directly Trace Overhead Costs to Activities and Cost Objects,31,Step 3: Assign Costs to Activity Cost Pools,At Classic Brass the following distribution of resource consumption across activity cost pools is determined.,*Not included because they are directly traced to customer orders.,32,Indirect factory wages $500,000 Percent consumed by customer orders 25% $125,000,Step 3: Assign Costs to Activity Cost Pools,33,Factory equipment depreciation $300,000 Percent consumed by customer orders 20% $ 60,000,Step 3: Assign Costs to Activity Cost Pools,34,Step 3: Assign Costs to Activity Cost Pools,35,Step 4: Calculate Activity Rates,Direct Materials,Direct Labor,Shipping Costs,Overhead Costs,Traced,Traced,Traced,Cost Objects: Products, Customer Orders, Customers,36,Step 4: Calculate Activity Rates,Direct Materials,Direct Labor,Shipping Costs,Order Size,Customer Orders,Product Design,Customer Relations,Other,Overhead Costs,Cost Objects: Products, Customer Orders, Customers,First-Stage Allocation,37,Step 4: Calculate Activity Rates,Direct Materials,Direct Labor,Shipping Costs,Cost Objects: Products, Customer Orders, Customers,Order Size,Customer Orders,Product Design,Customer Relations,Other,Overhead Costs,First-Stage Allocation,Second-Stage Allocations,$/MH,$/Order,$/Design,$/Customer,Unallocated,38,Step 4: Calculate Activity Rates,The ABC team estimates that Classic Brass will have the following total activities for each activity cost pool . . . 1,000 customer orders, 200 new designs, 20,000 machine-hours 100 customers. Now the team can compute the individual activity rates by dividing the total cost for each activity by the total activity levels,39,Step 4: Calculate Activity Rates,After the first-stage allocation is complete, computation of activity rates for each activity cost pool can be done as follows:,40,Step 5: Assign Costs to Cost Objects,Lets take a look at how our system works for just one customer Windward Yachts.,Standard Stanchions (no design required) 1. 400 units ordered with 2 separate orders. 2. Each stanchion required 0.5 machine-hours . 3. Selling price is $34 each. 4. Direct materials total $2,110. 5. Direct labor totals $1,850. 6. Shipping costs total $180.,Custom Compass Housing (requires new design) 1. One order during the year. 2. Each housing required 4 machine-hours . 3. Selling price is $650 each. 4. Direct materials total $13. 5. Direct labor totals $50. 6. Shipping costs total $25.,41,Step 5: Assign Costs to Cost Objects,The customer-level cost is assigned to customers directly; it is not assigned to products.,42,Step 6: Prepare Management Reports,43,Step 6: Prepare Management Reports,44,Step 6: Prepare Management Reports,Customer Profitability Analysis,45,Product Margins,Traditional Cost Accounting System (MH = machine hour),400 units x 0.5 MH/unit x $50/MH = $10,000,46,47,Activity-based versus conventional product costs,Conventional costing assumes product costs are driven by volume-based cost drivers Conventional costing ignores batch size - units produced in large batches consume a relatively low amount per unit of batch costs ABC can include non-manufacturing costs,48,ABC benefits will be greatest where.,Overhead costs are a significant proportion of total cost, and a large part of overhead is not directly related to production volume The business has a diverse product range, and the individual products use of support resources differs from their use of volume-based cost drivers,49,ABC benefits will be greatest where.,Production activity involves diverse batch sizes and product complexity. There are likely to be high costs associated with making inappropriate decisions, based on inaccurate product costs. The cost of designing, implementing and maintaining an ABC system is relatively low due to sophisticated IT support,50,Impediments to introducing ABC,Lack of awareness of ABC Uncertainty about the potential benefits from ABC Firms understand the need for change but are concerned about the extensive resource requirements to implement ABC Resistance to change among managers and employees Reading by Booth and Giacobbe,51,Other activity-based costing issues,Sources of variations in types of ABC include whether actual (past) or budgeted costs are analysed the implementation is a one-off project or an on-going system cost objects, other than products, are included,52,Other activity-based costing issues,Implications of excess capacity ABC estimates the cost of resources used to perform activities to produce and sell products, which may not always equal the cost of resources supplied need to account for the costs of unused capacity when budgeted costs have been used to generate activity-based product costs,53,Other activity-based costing issues,Behavioural issues change can be perceived as threatening ABC may require changes in data collected and collection and analysis procedures bottom-up change management may give some degree of ownership of any changes caused by ABC management must be seen as committed to the change process,54,Limitations of activity-based costing,If a high level of facility-level costs are allocated to products, this can lead to an arbitrary element of product cost Unitised batch, product and facility-level costs can lead to product costs that are of limited use for decision making The cost of updating an ABC system can be very high, but this is needed to avoid producing outdated, irrelevant information,55,Activity-based costing in service organisations,ABC can be difficult to implement in service firms, because high levels of facility costs cause problems with costing services individual activities are difficult to identify because they are non-repetitive a non-repetitive production environment makes it difficult to identify service outputs,56,Activity-based management (ABM),Process of using information from activity-based costing to analyse activities, cost drivers and performance so that customer value and profitability are improved Customer value the features of a product which customers are willing to pay,57,Using ABM to reduce costs,Identify the major opportunities for cost reduction Determine the real causes of these costs Develop a program to eliminate the causes, and, therefore, the costs Introduce performance measures to monitor the effectiveness of cost reduction efforts,58,Identifying the major opportunities for cost reduction,Value-added activities essential to the customer, or business Non-value-added activities can be eliminated without detriment to either the customers or the business,59,Value-Added Costs,A value-added cost is a cost that customers perceive as adding value, or utility, to a product or service e.g. for a computer: Adequate memory Pre-loaded software Reliability Easy-to-use keyboards,60,Non-value-added costs,A non-value-added cost is a cost that customers do not perceive as adding value, or utility, to a product or service. Cost of expediting Rework Repair Material inspection Idle time,61,Activity-Based Management,ABM can be used for Product pricing and mix decisions Cost reduction and process improvement decisions Design decisions,62,Product Pricing and Mix Decisions,ABC gives management insight into the cost structures for making and selling a diverse range of products. It provides more accurate product cost information and more detailed information on costs of activities and the drivers of those costs.,63,Cost Reduction and Process Improvement Decisions,Manufacturing and distribution personnel use ABC systems to focus on cost reduction efforts. Managers set cost-reduction targets in terms of reducing the cost per unit of the cost-allocation base.,64,Design Decisions,Management can identify and evaluate new designs to improve performance by evaluating how product and process designs affect activities and costs. Companies can work with their customers to evaluate the costs and prices of alternative design choices.,65,Just-In-Time Production Systems,Just-in-time (JIT) production systems take a “demand pull” approach in which goods are only manufactured when needed to satisfy customer orders. Demand triggers each step of the production process, starting with customer demand for a finished product at the end of the process, to the demand for direct materials at the beginning of the process.,66,Major Features of a JIT System,The five major features of a JIT system are: Organizing production in manufacturing cells Hiring and retaining multi-skilled workers Emphasizing total qua