贝恩咨询-财务分析工具(2)

Author:CollinsQian,Reviewer:BobArmacost,bc,CostAccounting,March1998,Copyright1998Bain&Company,Inc.,2,CostAccounting,ImportanceofcostallocationClientexampleDefinitionsdirectvs.indirect,fixedvs.variablebreakevenvolumeExercisescostallocationbreakevenvolumeKeytakeaways,Agenda,3,CostAccounting,ImportanceofcostallocationClientexampleDefinitionsdirectvs.indirect,fixedvs.variablebreakevenvolumeExercisescostallocationbreakevenvolumeKeytakeaways,Agenda,4,CostAccounting,Whichproductsareprofitable?Whatisthebreakevenvolumebyproduct?Whichproductsrequirecostreductionefforts?Howshouldwepriceourproducts?Whichcustomersegmentsaremostprofitable?,Itiscriticaltohaveaccurateandcompletecostdatatomakesoundstrategicandtacticalmanagementdecisions.,WhyAllocateCosts?,5,CostAccounting,Historically,only20%ofmanufacturingcostswere“shared”acrossproductlines.Today,typically50%ofcostsare“shared”acrossproducts.Sharedcostsmightincluderent,freight,andadministrativecosts.Forsimplicity,accountingtrackscostsbyfunction(e.g.,materials,salaries,benefits)ratherthanbytheactivitydevotedtoproductlines(e.g.,maintenanceofproductA,freightforproductB)Forcoststhatarenoteasilyassignedtoindividualproductlines,companiesnormallyselectthemostconvenientwaytoassignthem,notnecessarilythebestwayforexample,companiestendtoallocaterentcostsbasedonsomethingthatiseasytomeasure,suchasdirectlabordollarsforeachproductline.Abetterallocationmethod,however,mightbetheactualspaceresourcedemandsofeachproductline,Mostcompanieslackaccuratecostdatabyproduct.,WhyCostsAreOftenNotAllocatedCorrectly,6,CostAccounting,ImportanceofcostallocationClientexampleDefinitionsdirectvs.indirect,fixedvs.variablebreakevenvolumeExercisescostallocationbreakevenvolumeKeytakeaways,Agenda,7,CostAccounting,MiddleAmericaManufacturing,aBainclient,believedthatallthreeofitsproductlineswereprofitable.,Returnonsales:,10.0%,2.4%,1.6%,Sales:,$250MM,$100MM,$75MM,MiddleAmericaManufacturing-EstimatedProfitability,8,CostAccounting,Afterathoroughevaluation,theBainteamfoundthat$8.0MMincostshadbeenallocatedincorrectlyamongthethreeproducts.,MiddleAmericaManufacturing-CostAllocation,9,CostAccounting,TheBainteamalsodeterminedthatanadditional$18.8MMincostsshouldbeallocatedtothethreeproducts.,MiddleAmericaManufacturing-AdditionalCosts,10,CostAccounting,Bainsanalysisindicatedthatbothbicyclesandwalkingmowerswereunprofitable.MiddleAmericathenbegantoinvestigatewhethertoexitorfixthesetwobusinesses.,Returnonsales:,7.2%,(3.0%),(6.9%),Sales:,$250MM,$100MM,$75MM,MiddleAmericaManufacturing-ActualProfitability,11,CostAccounting,ImportanceofcostallocationClientexampleDefinitionsdirectvs.indirect,fixedvs.variablebreakevenvolumeExercisescostallocationbreakevenvolumeKeytakeaways,Agenda,12,CostAccounting,Definitions:,Coststhatdonotvarydirectlywithchangesinoutput,Coststhatvarydirectlywithchangesinoutput,Costsincurreddirectlyintheproductionordeliveryofafirmsproductorservice.Thesecostscaneasilybeidentifiedwith,orassignedto,aparticularproduct,Costsgenerallyincurredbythefirmoutsideoftheproductionprocess.Thesecostscannoteasilybeidentifiedwith,orassignedto,aparticularproduct,Allcostscanbebrokendownalongtwodimensions.,Fixed,Variable,Direct,Indirect,vs.,vs.,Examples:,EquipmentdepreciationRentAdvertising,RawmaterialsProductionlaborDeliverycosts,DirectlaborDedicatedequipmentRawmaterials,SG&AOfficesuppliesPlantmanager,Ruleofthumb:,Ifaparticularcostchangeswhenproductionincreasesordecreases,thecostisvariable.,Ifaparticularcost“goesaway”whenaproductisdroppedfromtheproductline,thecostisdirect.,TypesofCosts,13,CostAccounting,Allcostsarevariableoveraverylongtimehorizon(i.e.,forverylargeincreasesinvolume)Coststorunandmaintainacomputersystemthattracksproductordersareclearlyfixedforasmallchangeinvolume,suchasthatassociatedwithaslightlybusymonth.However,theyarevariableforalargechangeinvolume,suchasthatassociatedwithanewplant.Mostcostsaresemi-variable(i.e.,theytendtobeaddedinlumpsasvolumeincreases)Supervisorylabortendstobeconsideredfixedbecauseitisunlikelythatadditionalsupervisorswouldhavetobeaddedtohandleasmallincrease,say10%,involume.Buttheworkforcecanonlyincreasesomuchbeforeanadditionalsupervisorisneeded.Intheory,productionlaborisvariable.However,inmanyclientsituations,restraintsplacedbyunionsanddifficultyinhiringandfiringpeopleinresponsetoshort-termvolumefluctuationsmakeit,inpractice,semi-variable.,Definingtheappropriatetimehorizonfortheanalysisisimportant.,Ameaningfulanalysiswillisolatethefixedcostandvariablecomponentsofaparticularcost,Fixedvs.Variable,14,CostAccounting,Thefollowingisanillustrationofcostbehaviorforfixed,semi-variable,andvariablecosts:,Cost(Dollars),Volume(Units),Variablecosts,Semi-variablecosts,Fixedcosts,Fixedvs.Variable-Illustration,15,CostAccounting,Itisusefultoknowthefollowingtermswhendoingcostanalysis:,Simplifiedincomestatement:,-VariableCost,GrossMargin,-FixedCost,OperatingMargin,Revenue=PriceperUnitxVolume,Grossmarginisalsocalled“GrossProfit,”or“ContributionMargin”,OperatingMarginisalsocalled“OperatingProfit”,Revenue,IncomeStatementTerms,16,CostAccounting,Breakevenvolumeisthevolumeatwhichthecompanycoversitsfixedcosts.Atbreakevenvolume,theoperatingprofitiszero.,Volume,Contributionmargin(i.e.,revenuelessvariablecosts),Fixedcosts,Breakevenvolume,$,OperatingLoss,Fixedcosts,Unitcontribution,Priceperunit-Variablecostperunit,Breakevenvolume=,Fixedcosts,=,OperatingProfit,ContributionMargin,BreakevenVolume,17,CostAccounting,OperatingProfit=Revenue-Costs=Revenue-VariableCosts-Fixedcosts=(PriceperunitxVolume)-(VariablecostperunitxVolume)-Fixedcosts=Volumex(Priceperunit-Variablecostperunit)-Fixedcosts=VolumexUnitcontribution-FixedcostsThebreakevenvolumeisthevolumeforwhichoperatingprofit=00=BreakevenvolumexUnitcontribution-Fixedcosts,Fixedcosts,Unitcontribution,Priceperunit-Variablecostperunit,Breakevenvolume=,Fixedcosts,=,BackupforBreakevenFormula,18,CostAccounting,ImportanceofcostallocationClientexampleDefinitionsdirectvs.indirect,fixedvs.variablebreakevenvolumeExercisescostallocationbreakevenvolumeKeytakeaways,Agenda,19,CostAccounting,AllproductsaremadeusingthesameequipmentandmachineryPlantsupervisorsoverseeproductionofallthreeproductsEquipmentcapacityexiststoincreaseproductionby50%SalespeoplesellallthreeproductsSalespeoplearepaidabasesalary,plusacommissionwhichisapercentageofthesellingpriceMostadvertisingisproductspecificThecompanyusesatruckingcompanytodeliverproductstocustomers(costsarebasedonthelengthoftripandweight),MapleLeafCompanywantstoallocatecoststothethreeproductsitmakesandsells.,CostAllocationExercise-Background,20,CostAccounting,Howwouldyoucharacterizethefollowingcostsoveratimehorizoninwhichthecompanyplanstoincreasesalesvolumeby10%?,Fixed,Variable,Direct,Indirect,CEOssalaryRawmaterialsSupervisorylaborProductionfloorlaborRent,EquipmentdepreciationOfficesuppliesFreighttocustomerElectricitytorunmachinesInterestexpensetofinanceinventory,AdvertisingGoodwillamortizationSalescommissionsSalespeoplessalariesSalestravelandexpenses,Costs:,CostAllocationExercise-Question,21,CostAccounting,CostAllocationExercise-Answer,Mostcostsarefixedindirectorvariabledirect.,Fixed,Variable,Direct,Indirect,Advertising,RawmaterialsProductionfloorlaborFreighttocustomerInterestexpensetofinanceinventorySalescommissions,EquipmentdepreciationCEOssalarySupervisorylaborRentOfficesuppliesGoodwillamortizationSalespeoplessalariesSalestravelandexpenses,Electricitytorunmachines,22,CostAccounting,CostComponents,Fixedvs.Variable,Directvs.Indirect,Advertising,Fixed,becauseadvertisingisusuallynottieddirectlytovolume,Direct,because,inthiscase,mostofitisproductspecific,Equipmentdepreciation,Fixed,becauseexcesscapacityexistsfora10%increaseinvolume,Indirect,becauseallproductsaremadeonthesamemachines,CEOssalary,Fixed,assuminghis/hersalarydoesnotchangewith10%salesincrease,Indirect,becauseCEOoverseesthewholecompany,Supervisorylabor,Fixed,becauseitisunlikelythatadditionalsupervisorswillbeneededtohandlea10%increaseinvolume,Indirect,becausesupervisorsoverseeproductionofallthreeproducts,Indirect,becauseallthreeproductsareproducedatthesamesite,Rent,Fixed,assumingcurrentfacilityhasexcesscapacity,CostAllocationExercise-DetailedAnswer(1of3),23,CostAccounting,CostComponents,Fixedvs.Variable,Directvs.Indirect,Officesupplies,Fixed,becauseitisunlikelythatadditionalofficesupplieswillbeneededtohandle10%increaseinvolume,Indirect,becausetheofficesuppliesareusedtosupportallthreeproducts,Goodwillamortization,Fixed,becausegoodwillisnotdirectlyrelatedtovolume,Indirect,assumingthegoodwillisincurredtosupportthewholecompany,Salespeoplessalaries,Fixed,assumingthatcurrentsalesforcecanhandle10%additionalvolume,Indirect,becauseeachsalesmansellsallthreeproducts,Salestravelandexpenses,Fixed,assumingthat10%volumeincreasewillnotrequiresignificantincreaseinsalesactivities,Indirect,becausesales-forcehandlesallthreeproducts,Rawmaterial,Variable,becausea10%increaseinvolumewouldrequire10%morerawmaterials,Direct,becauserawmaterialsaredirectlytraceabletoindividualproducts,CostAllocationExercise-DetailedAnswer(2of3),24,CostAccounting,CostComponents,Fixedvs.Variable,Directvs.Indirect,Direct,becauseeventhoughtheproductsaremadeonthesamemachine,thehoursspentworkingoneachoftheproductsaredirectlytraceable,Productionfloorlabor,Variable,becausemoreproductionlaborwillbeneededtohandletheincreaseinvolume,Freighttocustomers,Variable,becausethefreightcostclearlyincreaseswiththevolumeincrease,Direct,becauseweightanddistancecanbedirectlytracedtoindividualproducts,Interestexpensetofinanceinventory,Variable,becausemoreinventorymeansmoreinventoryfinancingandhencemoreinterestexpense,Direct,becauseinventoryisproductspecific,Salescommissions,Variable,becausesalescommissionsarepaidbasedonapercentageofsales,Direct,becausecommissionsarebasedonindividualproductsales,Electricitytorunmachines,Variable,becauseitclearlyvarieswithvolume,Indirect,becauseallproductsaremadeonthesamemachines,CostAllocationExercise-DetailedAnswer(3of3),25,CostAccounting,LaborInmanyclientsituations,restraintsplacedbyunionsanddifficultyinhiringandfiringpeopleinresponsetoshorttermvolumefluctuationsmakeaportionoflaborcostsbehaveasfixedcostsElectricitytorunmachinesIntheorythisisdirect,butinpracticeitisconsideredindirectbecauseitisdifficulttotraceelectricitycosttoproductsAlso,the80/20ruleapplieshere.Electricityisusuallyasmallcostitem,and,forsimplicity,couldbeallocatedusingmachinehoursspentonproductionAdvertisingUsually,advertisingisnottiedtovolume.Forexample,advertisingtosupportacorporatebrandisnottiedtothevolumeoftheproductsunderthatbrand.Ifadvertisingisnottiedtovolume,itisfixedandindirect.,Therearefewcaveats:,CostAllocationExercise-Caveats,26,CostAccounting,Adeanofabusinessschoolisconsideringstartinganexecutiveprogram.Sheestimatestherevenuesandcostsasfollows:,Question:Howmanystudentsdoestheprogramneedtobreakeven?,Costs:,Revenue:,AdvertisingClassroomrental(Eachclassroomcanaccommodate15students)ProgramadministrationProgramdirectorssalaryFacultysalaries(Theprogramwillbestaffedwith1facultymemberforevery5students)GuestlecturerRoomandboardperstudentTextandsuppliesperstudent,Tuitionperstudent,$3,000,$13,500,$500,$30,000perclassroom,$15,000,$20,000,$20,000perfacultymember,$12,000,$3,200,BreakevenExercise-Background,27,CostAccounting,Step1:Categorizecosts,AdvertisingClassroomrentalProgramadministrationProgramdirectorssalaryFacultysalariesGuestlecturesRoomandboardperstudentTextandsuppliesperstudent,Fixed,Variable,Step2:Calculatefixedcosts,Fixedcosts:,$3,000Advertising$15,000Programadministration$20,000Programdirectorssalary$12,000Guestlectures$50,000,Semi-Variable,First,youmustcategorizecostsandcalculatefixedcosts.,BreakevenExercise-Answer(1of3),28,CostAccounting,Step4:CalculateunitcontributionUnitcontribution=Priceperunit-Variablecostperunit=$13,500tuition-3,200roomandboard-500textandsupplies$9,800,Step3:Calculatesemi-variablecostsClassroomFaculty10students$30,000$40,00015students$30,000$60,00020students$60,000$80,000,Thenyoumustcalculatesemi-variablecostsandtheunitcontribution.,BreakevenExercise-Answer(2of3),29,CostAccounting,*ThemosteffectivewaytocalculatethebreakevenvolumeistowriteasimpleformulainExcel,Step5:CalculatebreakevenvolumeBreakevenvolume=For10students:=12.2studentswith10studentstheprogramdoesnot,Ifyoukeepincreasingthenumberofstudentsbyoneandredoingthecalculation*,youwillfindthatthebusinessschoolneedstohave15studentstobreakevenontheexecutiveprogram,Fixedcosts,Unitcontribution,$140,000,$9,800,Nowyouarereadycalculatethebreakevenvolume.,For15students:,$120,000,$9,800,=14.3students,breakeven,BreakevenExercise-Answer(3of3),30,CostAccounting,ImportanceofcostallocationClientexampleDefinitionsdirectvs.indirect,fixedvs.variablebreakevenvolumeExercisescostallocationbreakevenvolumeKeytakeaways,Agenda,31,CostAccounting,AcompanymustknowthetotalcostassociatedwiththeproductionanddeliveryofitsgoodandservicesinordertomaketherightstrategicandtacticaldecisionsMostcompanieslackaccuratecostdatabyproductAllcostscanbebrokendownalongtwodimensions:fixedversusvariableanddirectversusindirectDefiningtheappropriatetimehorizonforcostsisimportantbecausefixedcostsare“fixed”onlyforacertaintimeframeBreakevenvolu