ACCA-F2-Part-B-8英语教学课件

Chapter8

AccountingforoverheadExplainthedifferenttreatmentofdirectandindirectexpenses.[k]Describetheproceduresinvolvedindeterminingproductionoverheadabsorptionrates.[k]Allocateandapportionproductionoverheadstocostcentresusinganappropriatebasis.[s]Reapportionservicecostcentrecoststoproductioncostcentres(usingthereciprocalmethodwhereservicecostcentresworkforeachother).[s]Select,applyanddiscussappropriatebasesforabsorptionrates.[s]Preparejournalandledgerentriesformanufacturingoverheadsincurredandabsorbed.[s]Calculateandexplaintheunderandoverabsorptionofoverheads.[s]Acostcardofanindividualunit:

Cost/unitDirectmaterials4kg@$2/kg$8Directlabour3hours@$7/hr$21Directexpenses$4Primecost$33Indirectcosts(overheads)$10Totalcost$43Overheadisthecostincurredinthecourseofmakingaproduct,providingaserviceorrunningadepartment,butwhichcannotbetraceddirectlyandinfulltotheproduct,serviceordepartment.IndirectmaterialsIndirectlabourIndirectexpenseProductionAdministrationSellinganddistributionIndirectcosts(overheads)Howoverheadisshared?1Absorptioncosting：anintroduction1.1Absorptioncosting,AC,吸收成本法Absorptioncostingisamethodforsharingoverheadsbetweendifferentproductsonafairbasis.Inabsorptioncosting,overheadcostswillbeaddedtoeachunitofproductmanufacturedandsold.Sometimes,butnotalways,theoverheadcostsofadministration,sellinganddistributionarealsoaddedtounitcosts,toobtainafullcostofsales.1.2AbsorptioncostingstepsTotalproductioncostDirectcostsIndirectcostsBeeasilytolinkedirectlytounitandputincostcardCostunitAbsorptioncostingMoredifficulttolinktounitsoweneedamethodologyCostCentres产品A产品B服务产品A产品BStep1Step2Step32Step1-allocationandapportionmentofproductionoverheadstocostcentresAllocation分配

istheprocessbywhichwholecostitemsarechargeddirecttoacostunitorcostcentre.DirectcostsareallocateddirectlytocostunitsIfindirectcostsareclearlyidentifiablewithcostcentres,theyareallocatedtothosecostcentresIfindirectcostsarenotclearlyidentifiablewithparticularcostcentres,theyareallocatedtogeneraloverheadcostcentresApportionment

分摊

isaprocedurewherebyindirectcostsarespreadfairlybetweencostcentres

Typesofcostcentre:

ProductiondepartmentProductionareaservicedepartmentAdministrationdepartmentSellingoradistributedepartmentOverheadcostcentre(commonexpense)FactorycostcentresMixingStoresstirringMaintenanceFinishedgoodsstoreProductioncostcentresServicecostcentresSolutionBaseofapportionment:itisconsideredimportantthatoverheadcostsshouldbesharedoutonafairbasis.

Thebasesofapportionmentforthemostusualcasesaregivenbelow：OverheadtowhichthebasisappliesBasisRent,rates,heatingandlight,repairsanddepreciationofbuildingsFloorareaoccupiedbyeachcostcentreDepreciation,insuranceofequipmentCostorbookvalueofequipmentPersonneloffice,Canteen,Welfare,Wagesandcostoffices,FirstaidNumberofemployees,orlabourhoursworkedineachcostcentre3.Step2-ReapportionmentofservicecostcentreoverheadServicecostcentrecostsmaybeapportionedtoproductioncostcentres.Allservicedepartmentcostsmustbeallocated.Directmethod(直接分配法）

Step-downmethod

（阶梯分配法）

Reciprocalmethod（交互分配法）3.2Reciprocalmethod

-RepeateddistributionReciprocalmethodisusedonlywhenservicedepartmentsworkforeachother-thatis,servicedepartmentsuseeachother'sservices.

3.3Reciprocalmethod

–algebraicmethod4.Step3–Absorptionofoverheadsintoproduction(costunits)Alloftheproductionoverheadcostshavenowbeenapportionedtotheproductioncostcentres.Wenowneedtochargethesetothecostunits.Thisistermedoverheadabsorption(Overheadrecovery).i.e.,addoverheadto,orabsorbtheminto,costunit.4.1Calculationofoverheadabsorptionrates(OAR)OAR=ProductionoverheadActivitylevel4.2Choosingtheactivity(a)Perunit(b)Perlabourhour(c)Permachinehour(d)%ofdirectlabourcost(e)%ofdirectmaterialscost(f)%ofprimecostMainmethodsusedinexam4.3ProcessofabsorptionintocostunitsCalculatetheoverheadabsorptionrateusinganappropriateactivitylevelFindtheactivitylevelperunit(e.g.machinehoursperunit)andthenapplytheOARcalculatedtothespecificunit.OARperunit

=OARpermachinehourxmachinehoursperunitRepeatforallproductioncostcentres.Themostappropriateactivityformixingdepartmentislabourhoursasitislabourintensivedepartment.Themostappropriateactivityformixingdepartmentismachinehoursasitismachineintensivedepartment.1.2AbsorptioncostingstepsTotalproductioncostDirectcostsIndirectcostsBeeasilytolinkedirectlytounitandputincostcardCostunitAbsorptioncostingMoredifficulttolinktounitsoweneedamethodologyCostCentres产品A产品B服务产品A产品BStep1Step2Step35.Isabsorptioncostingnecessary?Inabsorptioncosting,overheadcostswillbeaddedtoeachunitofproductmanufacturedandsold.

Thetheoreticaljustificationforusingabsorptioncostingisthatallproductionoverheadsareincurredintheproductionoftheorganisation'soutputandsoeachunitoftheproductreceivessomebenefitfromthesecosts.Eachunitofoutputshouldthereforebechargedwithsomeoftheoverheadcosts.Themainpracticalreasonsforusingabsorptioncostingareforinventoryvaluations,pricingdecisions,andestablishingtheprofitabilityofdifferentproducts.AbsorptioncostingisrecommendedinfinancialaccountingbyIAS2（InternationalAccountingStandard2）Inventories.IAS2dealswithfinancialaccountingsystems.IAS2statesthatcostsofallinventoriesshouldcomprisethosecostswhichhavebeenincurredinthenormalcourseofbusinessinbringingtheinventoriestotheir'presentlocationandcondition'.Inotherwords,infinancialaccounting,closinginventoriesshouldbevaluedatfullfactorycost,anditmaythereforebeconvenientandappropriatetovalueinventoriesbythesamemethodinthecostaccountingsystem.6.PredeterminedoverheadabsorptionratesOverheadsareusuallyaddedtocostunitsusingapredeterminedoverheadabsorptionrate,whichiscalculatedusingfiguresfromthebudget.Businessesneedtocosttheirproductionthroughouttheyear,notattheendofanaccountingperiod.Thereforetheypredetermineorestimatetheirabsorptionratesfortheyear.Pre-determinedOAR=BudgetedoverheadBudgetedactivitylevelOverheadabsorbed=ActualactivityxPredeterminedOAROverheadsabsorbedmaydifferfromactualoverheadcostsincurredforeitherorbothofthefollowingtworeasons:Actualexpenditurewasmoreorlessthanbudget(expenditurevariance).Actualunitsproduced(i.e.volume)weremoreorlessthanbudget(volumevariance).Over

absorptionUnder

absorptionIAS2Inventoriesstatesthattheactivitylevelusedforabsorptionofoverheadsshouldalwaysbethebudgeted(normal)activity,i.e.theexpectedlongtermaverage.ThisistostopfluctuationsinOAR’sduetofluctuationsinactivity.Itisalmostinevitablethatattheendoftheaccountingyeartherewillhavebeenanoverabsorptionorunderabsorptionoftheoverheadactuallyincurred.ThedifferencebetweentheoverheadabsorbedandtheactualoverheadisshownintheI/S

（IncomeStatement，损益表）sothatintotaltheactualoverheadischarged.Theactualoverheadisequaltotheamountabsorbedplusanunderabsorptionorminusanoverabsorption.7.Blanketabsorptionratesanddepartmentalabsorptionrates

Blanketabsorptionrate(综合吸收率)Usedthroughoutthefactoryandforalljobsandunitsofoutput

SeparateabsorptionratesUsedforeachdepartmentChapterroundupOverheadisthecostincurredinthecourseofmakingaproduct,providingaserviceorrunningadepartment,butwhichcannotbetraceddirectlyandinfulltotheproduct,serviceordepartment.Theobjectiveofabsorptioncostingistoincludeinthetotalcostofaproductanappropriateshareoftheorganisation'stotaloverhead.Anappropriateshareisgenerallytakentomeananamountwhichreflectstheamountoftimearideffortthathasgoneintoproducingaunitorcompletingajob.Themainreasonsforusingabsorptioncostingar