ABC成本分析法讲义

1、1Topic 6 Activity-Based CostingMAA 703Management Accounting第一管理资源网（），提供海量管理资料免费下载！2Evolution of ABClConventional 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 u

2、sing a volume-based predetermined overhead rate.第一管理资源网（），提供海量管理资料免费下载！3Product costs dont make senselProblem: There may be no relationship between the overhead application base and the way that different products cause overhead costslThe result:vHigh-volume simple products are over- costed and over

3、-pricedvLow-volume complex products are under-costed and under-priced第一管理资源网（），提供海量管理资料免费下载！4Plantwide Overhead RatesCompanies have tended to use 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

4、 are now done by automated equipment.第一管理资源网（），提供海量管理资料免费下载！5A two stage process isnecessary because costsare allocated to departmentsand then to products.Finishing DepartmentShipping DepartmentPainting DepartmentDepartmental Overhead Rates第一管理资源网（），提供海量管理资料免费下载！6Department1Department2Department3Ind

5、irectLaborIndirectMaterialsOtherOverheadDepartmental Overhead Rates第一管理资源网（），提供海量管理资料免费下载！下载自第一管理资源网7Department1Department2Department3 Products Departmental Overhead RatesIndirectLaborIndirectMaterialsOtherOverhead第一管理资源网（），提供海量管理资料免费下载！8Department1Department2Department3 Products Direct Labour Hours

6、MachineHoursRawMaterialsCostDepartmental Allocation BasesDepartmental Overhead RatesIndirectLaborIndirectMaterialsOtherOverhead第一管理资源网（），提供海量管理资料免费下载！9Cost Distortions caused by 2-stage allocationslThere is a no link between the cause of support activity costs and the basis for assigning these costs

7、 to productslWhy?1. Allocations are based on unit or volumerelated measures.2. Different products consume different amounts of support activities. 第一管理资源网（），提供海量管理资料免费下载！10Questionable profit marginslTo compete in the marketplace, some companies have had to cut the prices of high volume popular item

8、s.lButThey have been able to achieve high mark-ups on low volume specialty products.第一管理资源网（），提供海量管理资料免费下载！11Erosion of company profitslPrice cuts produce increased sales in units but decreased total revenuelHigh mark-ups on specialty products didnt offset the fall in profit margins of high volume p

9、roducts第一管理资源网（），提供海量管理资料免费下载！12Causes of problemslIncreased product diversitylchanging cost structuresluse of volume-based cost driversHave resulted in:distorted product costs第一管理资源网（），提供海量管理资料免费下载！13Solution: Activity Based CostinglABC uses cost drivers that directly link activities performed to p

10、roducts made.lcost drivers are selected which measure the average demand placed on each activity by each product.lactivity cost pools are assigned to products in proportion to the way that they consume each activity.第一管理资源网（），提供海量管理资料免费下载！14Solution: Activity Based CostinglACTIVITIES CONSUME RESOURC

11、ESlPRODUCTS CONSUME ACTIVITIESlActivities are used to link resource costs to products第一管理资源网（），提供海量管理资料免费下载！15Activity 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 agoo

12、d supplement to our traditional cost systemI agree!第一管理资源网（），提供海量管理资料免费下载！16Overhead rates maybe based on activityat capacity.Activity Based Costing (ABC)Activity-Based CostingBoth manufacturingand nonmanufacturingcosts may be assigned toproducts.Some manufacturingcosts may be excludedfrom productco

13、sts.There are a numberof cost pools, each ofwhich is allocatedusing a uniquemeasure of activity.Allocation bases oftendiffer fromtraditional costingsystems.第一管理资源网（），提供海量管理资料免费下载！17How Costs are Treated Under Activity-Based CostingLevel of ComplexityOverhead Allocation Plantwide OverheadRateDepartme

14、ntalOverheadRatesActivity BasedCosting第一管理资源网（），提供海量管理资料免费下载！18Activity-based costinglis a way of measuring both the cost of cost objects and the performance of activitieslcan help solve problems such as vdistorted product costsvpoor cost controllthe form of ABC adopted depends on the problems that

15、need to be addressed第一管理资源网（），提供海量管理资料免费下载！19Designing an ABC SystemCost Objects(e.g., productsand customers)ActivitiesConsumptionof ResourcesCost第一管理资源网（），提供海量管理资料免费下载！20第一管理资源网（），提供海量管理资料免费下载！21Identifying and Defining ActivitiesAn ACTIVITY is a part of the productionprocess for which managementwa

16、nts a separate reporting ofcosts.Unit-LevelActivitiesBatch-Level ActivitiesProduct-sustainingActivitiesFacility-sustainingActivities第一管理资源网（），提供海量管理资料免费下载！22Output Unit-Level Costs.are resources sacrificed on activities performed on each individual unit of product or service e.g.vEnergy used by mach

17、inesvMachine depreciation or repairsThe Key Question: Does the amount of the activity cost pool increase with the number of units produced?第一管理资源网（），提供海量管理资料免费下载！23Batch-Level Costs.are resources sacrificed on activities that are related to a batch of units rather than to each individual unit of pro

18、duct or service.lSet-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.第一管理资源网（），提供海量管理资料免费下载！24Product-Sustaining.(or service-sustaining) costs are resources sacrificed on activit

19、ies 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.第一管理资源网（），提供海量管理资料免费下载！25Facility-Sustaining Costs.are resources sacrificed on activities that cannot be traced to individ

20、ual products or services but which support the organization as a whole.lGeneral administrationvrentvbuilding securityvCEOs salary第一管理资源网（），提供海量管理资料免费下载！26Different forms of ABClSimple approach - includes manufacturing overhead onlylABC system for all indirect costs - includes manufacturing and non-m

21、anufacturing costslComprehensive system - includes all product-related costs, except direct material第一管理资源网（），提供海量管理资料免费下载！27The Mechanics of ABCClassic Brass Ltd makes finely machined brass fittings for a variety of applications.For this company, the ultimate cost objects are:Products,Customer orde

22、rs, andCustomers.One overhead cost - shipping - can be traced directly to customer orders.The companys activity cost pools are shown on the next slide.第一管理资源网（），提供海量管理资料免费下载！28Identify and Define Activities and Activity Cost PoolsAt Classic Brass, the ABC team, selected the following activity cost p

23、ools and activity measures:第一管理资源网（），提供海量管理资料免费下载！29Identify and Define Activities and Activity Cost Pools第一管理资源网（），提供海量管理资料免费下载！30Production DepartmentIndirect factory wages500,000$ Factory equipment depreciation300,000 Factory utilities120,000 Factory building lease80,000 1,000,000$ Shipping costs

24、 traced to customer orders40,000 General Administrative DepartmentAdministrative wages and salaries400,000 Office equipment depreciation50,000 Administrative building lease60,000 510,000 Marketing DepartmentMarketing wages and salaries250,000 Selling expenses50,000 300,000 Total overhead costs1,850,

25、000$ Overhead Costs at Classic Brass(Manufacturing and NonManufacturing)Whenever Possible, Directly Trace Overhead Costs to Activities and Cost Objects第一管理资源网（），提供海量管理资料免费下载！31Assign Costs to Activity Cost Pools Customer Orders Product Design Order Size Customer Relations Other TotalProduction Depar

26、tmentIndirect factory wages25%40%20%10%5%100%Factory equipment depreciation20%0%60%0%20%100%Factory utilities0%10%50%0%40%100%Factory building lease0%0%0%0%100%100%Shipping costs *General Administrative DepartmentAdministrative wages and salaries15%5%10%30%40%100%Office equipment depreciation30%0%0%

27、25%45%100%Administrative building lease0%0%0%0%100%100%Marketing DepartmentMarketing wages and salaries20%10%0%60%10%100%Selling expenses10%0%0%70%20%100%Activity Cost PoolsAt Classic Brass the following distribution of resource consumption across activity cost pools is determined.*Not included beca

28、use they are directly traced to customer orders.第一管理资源网（），提供海量管理资料免费下载！32 Customer Orders Product Design Order Size Customer Relations Other TotalProduction DepartmentIndirect factory wages125,000$ Factory equipment depreciationFactory utilitiesFactory building leaseGeneral Administrative Department

29、Administrative wages and salariesOffice equipment depreciationAdministrative building leaseMarketing DepartmentMarketing wages and salariesSelling expensesTotalActivity Cost PoolsAssign Costs to Activity Cost PoolsProduction DepartmentIndirect factory wages500,000$ Factory equipment depreciation300,

30、000 Factory utilities120,000 Factory building lease80,000 1,000,000$ Shipping costs traced to customer orders40,000 General Administrative DepartmentAdministrative wages and salaries400,000 Office equipment depreciation50,000 Administrative building lease60,000 510,000 Marketing DepartmentMarketing

31、wages and salaries250,000 Selling expenses50,000 300,000 Total overhead costs1,850,000$ Overhead Costs at Classic Brass(Manufacturing and NonManufacturing)第一管理资源网（），提供海量管理资料免费下载！33 Customer Orders Product Design Order Size Customer Relations Other TotalProduction DepartmentIndirect factory wages125,

32、000$ Factory equipment depreciation60,000 Factory utilitiesFactory building leaseGeneral Administrative DepartmentAdministrative wages and salariesOffice equipment depreciationAdministrative building leaseMarketing DepartmentMarketing wages and salariesSelling expensesTotalActivity Cost PoolsProduct

33、ion DepartmentIndirect factory wages500,000$ Factory equipment depreciation300,000 Factory utilities120,000 Factory building lease80,000 1,000,000$ Shipping costs traced to customer orders40,000 General Administrative DepartmentAdministrative wages and salaries400,000 Office equipment depreciation50

34、,000 Administrative building lease60,000 510,000 Marketing DepartmentMarketing wages and salaries250,000 Selling expenses50,000 300,000 Total overhead costs1,850,000$ Overhead Costs at Classic Brass(Manufacturing and NonManufacturing)Assign Costs to Activity Cost Pools第一管理资源网（），提供海量管理资料免费下载！34 Custo

35、mer Orders Product Design Order Size Customer Relations Other TotalProduction DepartmentIndirect factory wages125,000$ 200,000$ 100,000$ 50,000$ 25,000$ 500,000$ Factory equipment depreciation60,000 - 180,000 - 60,000 300,000 Factory utilities- 12,000 60,000 - 48,000 120,000 Factory building lease-

36、- - - 80,000 80,000 General Administrative DepartmentAdministrative wages and salaries60,000 20,000 40,000 120,000 160,000 400,000 Office equipment depreciation15,000 - - 12,500 22,500 50,000 Administrative building lease- - - - 60,000 60,000 Marketing DepartmentMarketing wages and salaries50,000 25

37、,000 - 150,000 25,000 250,000 Selling expenses5,000 - - 35,000 10,000 50,000 Total315,000$ 257,000$ 380,000$ 367,500$ 490,500$ 1,810,000$ Activity Cost PoolsAssign Costs to Activity Cost Pools第一管理资源网（），提供海量管理资料免费下载！35Calculate Activity RatesDirectMaterialsDirectLaborShippingCostsOverhead CostsTraced

38、TracedTracedCost Objects:Products, Customer Orders, Customers第一管理资源网（），提供海量管理资料免费下载！36Calculate Activity RatesDirectMaterialsDirectLaborShippingCostsOrderSizeCustomerOrdersProductDesignCustomerRelationsOtherOverhead CostsCost Objects:Products, Customer Orders, CustomersFirst-Stage Allocation第一管理资源网（

39、），提供海量管理资料免费下载！37Calculate Activity RatesDirectMaterialsDirectLaborShippingCostsCost Objects:Products, Customer Orders, CustomersOrderSizeCustomerOrdersProductDesignCustomerRelationsOtherOverhead CostsFirst-Stage AllocationSecond-Stage Allocations$/MH$/Order$/Design$/CustomerUnallocated第一管理资源网（），提供海

40、量管理资料免费下载！38Step 4: Calculate Activity RatesThe ABC team estimates that Classic Brass will have the following total activities for each activity cost pool . . .v1,000 customer orders,v200 new designs,v20,000 machine-hoursv100 customers. Now the team can compute the individual activity rates by divid

41、ing the total cost for each activity by the total activity levels第一管理资源网（），提供海量管理资料免费下载！39Calculate Activity RatesAfter the first-stage allocation is complete, computation of activity rates for each activity cost pool can be done as follows:第一管理资源网（），提供海量管理资料免费下载！40Assign Costs to Cost ObjectsLets t

42、ake a look at how our system works for just one customer Windward Yachts.Standard Stanchions (no design required)Custom Compass Housing (requires new design)第一管理资源网（），提供海量管理资料免费下载！41Assign Costs to Cost Objects第一管理资源网（），提供海量管理资料免费下载！42Prepare Management ReportsStandard StanchionsSales13,600$ Cost: D

43、irect materials2,110$ Direct labor1,850 Shipping costs180 Customer orders630 Product design- Order size3,800 8,570 Product margin5,030$ 第一管理资源网（），提供海量管理资料免费下载！43Prepare Management Reports第一管理资源网（），提供海量管理资料免费下载！44Windward YachtsProduct margins: Standard stanchion5,030$ Custom compass housing(1,114) T

44、otal product margin3,916 Less: Customer relations3,675 Customer margin241$ Prepare Management Reports第一管理资源网（），提供海量管理资料免费下载！45Product MarginsTraditionalPredetermined manufacturingoverhead rate $1,000,000 20,000 MH= $50/MH=第一管理资源网（），提供海量管理资料免费下载！46第一管理资源网（），提供海量管理资料免费下载！47Activity-based versus conven

45、tional product costslConventional costing assumes product costs are driven by volume-based cost driverslConventional costing ignores batch size - units produced in large batches consume a relatively low amount per unit of batch costs lABC can include non-manufacturing costs第一管理资源网（），提供海量管理资料免费下载！48A

46、BC benefits will be greatest where.lOverhead costs are a significant proportion of total cost, and a large part of overhead is not directly related to production volumelThe business has a diverse product range, and the individual products use of support resources differs from their use of volume-bas

47、ed cost drivers第一管理资源网（），提供海量管理资料免费下载！49ABC benefits will be greatest where.lProduction activity involves diverse batch sizes and product complexity.lThere are likely to be high costs associated with making inappropriate decisions, based on inaccurate product costs.lThe cost of designing, implementi

48、ng and maintaining an ABC system is relatively low due to sophisticated IT support第一管理资源网（），提供海量管理资料免费下载！50Impediments to introducing ABClLack of awareness of ABClUncertainty about the potential benefits from ABClFirms understand the need for change but are concerned about the extensive resource req

49、uirements to implement ABClResistance to change among managers and employeesvReading by Booth and Giacobbe第一管理资源网（），提供海量管理资料免费下载！51Other activity-based costing issueslSources of variations in types of ABC include whethervactual (past) or budgeted costs are analysedvthe implementation is a one-off pr

50、oject or an on-going systemvcost objects, other than products, are included第一管理资源网（），提供海量管理资料免费下载！52Other activity-based costing issueslImplications of excess capacityvABC estimates the cost of resources used to perform activities to produce and sell products, which may not always equal the cost of

51、resources suppliedvneed to account for the costs of unused capacity when budgeted costs have been used to generate activity-based product costs第一管理资源网（），提供海量管理资料免费下载！53Other activity-based costing issueslBehavioural issues vchange can be perceived as threateningABC may require changes in data collec

52、ted and collection and analysis proceduresvbottom-up change management may give some degree of ownership of any changes caused by ABCvmanagement must be seen as committed to the change process第一管理资源网（），提供海量管理资料免费下载！54Limitations of activity-based costinglIf a high level of facility-level costs are a

53、llocated to products, this can lead to an arbitrary element of product costlUnitised batch, product and facility-level costs can lead to product costs that are of limited use for decision makinglThe cost of updating an ABC system can be very high, but this is needed to avoid producing outdated, irre

54、levant information第一管理资源网（），提供海量管理资料免费下载！55Activity-based costing in service organisationslABC can be difficult to implement in service firms, becausevhigh levels of facility costs cause problems with costing servicesvindividual activities are difficult to identify because they are non-repetitiveva

55、non-repetitive production environment makes it difficult to identify service outputs第一管理资源网（），提供海量管理资料免费下载！56Activity-based management (ABM)lProcess of using information from activity-based costing to analyse activities, cost drivers and performance so that customer value and profitability are impro

56、vedlCustomer valuevthe features of a product which customers are willing to pay 第一管理资源网（），提供海量管理资料免费下载！57Using ABM to reduce costslIdentify the major opportunities for cost reductionlDetermine the real causes of these costslDevelop a program to eliminate the causes, and, therefore, the costslIntrodu

57、ce performance measures to monitor the effectiveness of cost reduction efforts第一管理资源网（），提供海量管理资料免费下载！58Identifying the major opportunities for cost reductionlValue-added activitiesvessential to the customer, or businesslNon-value-added activitiesvcan be eliminated without detriment to either the cus

58、tomers or the business第一管理资源网（），提供海量管理资料免费下载！59Value-Added CostslA 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 softwareReliabilityEasy-to-use keyboards第一管理资源网（），提供海量管理资料免费下载！60Non-value-added c

59、ostslA non-value-added cost is a cost that customers do not perceive as adding value, or utility, to a product or service.Cost of expeditingReworkRepairMaterial inspectionIdle time第一管理资源网（），提供海量管理资料免费下载！61Activity-Based Management lABM can be used forProduct pricing and mix decisionsCost reduction a

60、nd process improvement decisionsDesign decisions第一管理资源网（），提供海量管理资料免费下载！62Product Pricing and Mix DecisionslABC gives management insight into the cost structures for making and selling a diverse range of products.lIt provides more accurate product cost information and more detailed information on cos