《成本与管理会计（英文）》课件-Chapter 6 Service costing

Chapter6CostAllocationsofServiceDepartmentsCostandManagementAccountingLearningObjectives01Understandthereasonsfortheneedforallocatingservicedepartmentcosts.02Mastertheprocedureofdirectmethod,step-downmethodandreciprocalmethodtoallocateservicedepartmentcoststoproductiondepartments.03Understandthedifferencesamongthethreemethodsofservicedepartmentcostsallocation.

Lesson6-Part1:DirectMethod

Chapter6ServicecostingCostandManagementAccountingTerminology:

EnglishChineseProductionDepartment生产部门ServiceDepartment服务支持部门Interdepartmental不同部门间的Allocation分配DirectMethod

直接分配法Step-DownMethod

顺序分配法ReciprocalMethod

交互分配法OverheadCost

期间费用CostandManagementAccountingOperatingDepartmentsVSServiceDepartmentProductionDepartmentCarryOutTheMainPurposesofTheOrganization

ServiceDepartmentDoNotEngageinOperatingActivitiesDirectly.e.g:TheProductionDepartmentatShantuiConstructionMachineryCo.,Ltd.e.g:TheAccountingDepartmentatShantuiConstructionMachineryCo.,Ltd.01Toencourageproducing

departmentstowiselyuseservicedepartmentresources.02Toprovideproducingdepartmentswithmorecompletecostdataformakingdecisions.03Tohelpmeasuretheprofitabilityofproducingdepartments.04Tocreateanincentiveforservicedepartmentstoproductionefficiently.6CostandManagementAccountingWhyWeNeedToChargeServiceDepartmentCosts?

CostandManagementAccountingInterdepartmentalServicesServiceDepartmentCostsbecomeoverheadcoststoProductionDepartment.ProductionDepartmentQuickCheckCostandManagementAccountingWhichofthefollowingstatementistrueaboutServiceDepartment?A.Servicedepartmentengageinoperatingactivitiesdirectly.B.Servicedepartmentdonotengageinoperatingactivitiesdirectly.C.Forproductiondepartment,theservicedepartmentcostsallocatedbecomemanufacturingoverheadcosts.D.Servicedepartmentcostsdonotneedtobeallocated.DirectMethod01ReciprocalMethod03Step-downMethod02Methodsofallocatingservicedepartmentcoststoproducingdepartmentinclude:1)thedirectmethod,2)thestep-downmethodand3)thereciprocalmethod.AllocationApproaches

CostandManagementAccountingCostandManagementAccountingDirectMethodThedirectmethodallocateseachservicedepartment’scoststotheproductiondepartmentsdirectly.Theinteractionsbetweenservicedepartmentsareignored

priortoallocation.Thisisthesimplestmethodandthemostwidely-usedmethod.ServiceDepartment1ServiceDepartment2ProductionDepartment1ProductionDepartment2CostandManagementAccountingDirectMethod--Example

ServiceDeparmentsProductionDepartmentsStoreroomCafeteriaMachiningAssemblyDepartmentCostsBeforeAllocation$60000$350000$500000$700000SquareFeetOccupied250055006000085000

NumberofEmloyees5102030AllocationBaseStoreroom:SquareFeetOccupiedCafeteria:NumberofEmployeesCostandManagementAccountingDirectMethod--ExampleServiceDeparmentsProductionDepartmentsStoreroomCafeteriaMachiningAssemblyDepartmentCostsBeforeAllocation$60000$350000$500000$700000StoreroomAllocation???CafeteriaAllocation???TotalAfterAllocation????CostandManagementAccountingDirectMethod--Example

ServiceDeparmentsProductionDepartmentsStoreroomCafeteriaMachiningAssemblyDepartmentCostsBeforeAllocation$60,000$350,000$500,000$700,000StoreroomAllocation(60,000)24,828?CafeteriaAllocation???TotalAfterAllocation$0???$60,000×AllocationBase:SquareFeetOccupiedProportionofSqaureoccupiedbyMachiningCostandManagementAccountingDirectMethod--Example

ServiceDeparmentsProductionDepartmentsStoreroomCafeteriaMachiningAssemblyDepartmentCostsBeforeAllocation$60,000$350,000$500,000$700,000StoreroomAllocation(60,000)24,82835,172CafeteriaAllocation???TotalAfterAllocation$0???$60,000×AllocationBase:SquareFeetOccupiedProportionofSqaureoccupiedbyAssemblyCostandManagementAccountingDirectMethod--Example

ServiceDeparmentsProductionDepartmentsStoreroomCafeteriaMachiningAssemblyDepartmentCostsBeforeAllocation$60,000$350,000$500,000$700,000StoreroomAllocation(60,000)24,82835,172CafeteriaAllocation(350,000)140,000?TotalAfterAllocation$0$0$164,828?$350,000×AllocationBase:NumberofEmployeesProportionofEmployeesusedbyMachiningCostandManagementAccountingDirectMethod--ExampleServiceDeparmentsProductionDepartmentsStoreroomCafeteriaMachiningAssemblyDepartmentCostsBeforeAllocation$60,000$350,000$500,000$700,000StoreroomAllocation(60,000)24,82835,172CafeteriaAllocation(350,000)140,000210,000TotalAfterAllocation$0$0$664,828$945,172$350,000×AllocationBase:NumberofEmployeesProportionofEmployeesusedbyAssemblyCostandManagementAccountingSummary

Thedirectmethodallocateseachservicedepartment’scoststotheproductiondepartmentsdirectly.Forproductiondepartments,theservicedepartmentcostsallocatedarerecordedasoverheadcosts.ServiceDepartment1ServiceDepartment2ProductionDepartment1ProductionDepartment2IgnoreInteractions

Lesson6-Part2:Step-DownMethod

Chapter6CostAllocationofServiceDepartmentsCostandManagementAccountingTerminology:

EnglishChineseStep-down逐渐减少的Rank次序排列Sequence顺序Remaining剩余的Predetermined预先确定的Percentage百分比CostandManagementAccountingStep-DownMethod

Thestep-downmethodallocatesthecostsofsomeservicedepartmentstootherdepartmentsinstep-downsequence.Onceaservicedepartment’scostshavebeenallocated,

nosubsequentcostsareallocatedbacktoit.ServiceDepartment1ServiceDepartment2ProductionDepartment1ProductionDepartment2020103StepOneRankServiceDepatmentsStepThreeThecostsoftheservicedepartmentnextinsequencearesimilarlyallocated.Thecostsoftoprankingservicedepartmentisditributedtolowerrankingdepartmentandtheproductiondepartments.StepTwoStep-DownMethodCostandManagementAccountingCostandManagementAccountingStep-DownMethod--ExampleServiceDeparmentsProductionDepartmentsStoreroomCafeteriaMachiningAssemblyDepartmentCostsBeforeAllocation$60000$350000$500000$700000SquareFeetOccupied250055006000085000

NumberofEmloyees5102030AllocationBaseStoreroom:SquareFeetOccupiedCafeteria:NumberofEmployeesCostandManagementAccountingStep-DownMethod--ExampleServiceDeparmentsProductionDepartmentsStoreroomCafeteriaMachiningAssemblyDepartmentCostsBeforeAllocation$60000$350000$500000$700000CafeteriaAllocation????StoreroomAllocation???TotalAfterAllocation????Step1:RankCafeteriaStoreroomCostandManagementAccountingStep-DownMethod--ExampleServiceDeparmentsProductionDepartmentsStoreroomCafeteriaMachiningAssemblyDepartmentCostsBeforeAllocation$60000$350000$500000$700000CafeteriaAllocation31,818(350,000)??StoreroomAllocation???TotalAfterAllocation?$0??Step2AllocatecafeteriacoststoStoreroom,MachiningandAssemblyDepartments.$350,000×CostandManagementAccountingStep-DownMethod--ExampleServiceDeparmentsProductionDepartmentsStoreroomCafeteriaMachiningAssemblyDepartmentCostsBeforeAllocation$60000$350000$500000$700000CafeteriaAllocation31,818(350,000)127,273?StoreroomAllocation???TotalAfterAllocation?$0??$350,000×AllocationBase:NumberofEmployeesProportionofEmployeesusedbyMachiningCostandManagementAccountingStep-DownMethod--ExampleServiceDeparmentsProductionDepartmentsStoreroomCafeteriaMachiningAssemblyDepartmentCostsBeforeAllocation$60000$350000$500000$700000CafeteriaAllocation31,818(350,000)127,273190,909StoreroomAllocation???TotalAfterAllocation?$0??$350,000×AllocationBase:NumberofEmployeesProportionofEmployeesusedbyAssemblyCostandManagementAccountingStep-DownMethod--ExampleServiceDeparmentsProductionDepartmentsStoreroomCafeteriaMachiningAssemblyDepartmentCostsBeforeAllocation$60000$350000$500000$700000CafeteriaAllocation31,818(350,000)127,273190,909StoreroomAllocation(91,818)??TotalAfterAllocation$0$0??Step3DistributethenewstoreroomcoststoMachiningandAssembly.CostandManagementAccountingStep-DownMethod--ExampleServiceDeparmentsProductionDepartmentsStoreroomCafeteriaMachiningAssemblyDepartmentCostsBeforeAllocation$60000$350000$500000$700000CafeteriaAllocation31,818(350,000)127,273190,909StoreroomAllocation(91,818)37,994?TotalAfterAllocation$0$0$165,267?$91,818×AllocationBase:SquareFeetOccupiedProportionofSqaureoccupiedbyMachiningCostandManagementAccountingStep-DownMethod--ExampleServiceDeparmentsProductionDepartmentsStoreroomCafeteriaMachiningAssemblyDepartmentCostsBeforeAllocation$60000$350000$500000$700000CafeteriaAllocation31,818(350,000)127,273190,909StoreroomAllocation(91,818)37,99453,824TotalAfterAllocation$0$0$665,267$944,733$91,818×AllocationBase:SquareFeetOccupiedProportionofSqaureoccupiedbyAssemblyQuickCheckCostandManagementAccountingWhichofthefollowingstatementistrueaboutStep-downMethod?A.Onceaservicedepartment'scostshavebeenallocated,subsequentcostscanbeallocatedbacktoit.B.Ranktheservicedepartmentsinorderoftheirtotalcost,fromlowestcostdepartmenttohighest.C.Step-downmethodismoreaccuratethandirectmethod.D.TheprocedureofStep-downmethodcanbedividedinto4steps.CostandManagementAccountingSummaryUnderStep-downmethod,thecostallocationsareperformedinstep-downfashion,followingapredeterminedsequencethatitistostartwiththeservicedepartmentwiththehighestcosts.Onceaservicedepartment’scostshavebeenallocated,itneverreceivesasubsequentallocationfromanotherservicedepartment.ServiceDepartment1ServiceDepartment2ProductionDepartment1ProductionDepartment2

Lesson6-Part3:ReciprocalMethod

Chapter6CostAllocationsofServiceDepartmentsCostandManagementAccountingTerminology:

EnglishChineseAccurate准确的Complexity复杂性Reciprocal相应的Recognition承认Substitution置换Equation等式CostandManagementAccountingReciprocalMethod

Thereciprocalmethod

fullyrecognizesselfservicesandinterdepartmentalservicesamongservicedepartments.Thisisthemostaccurate

amongthethreemethods.Itisthemostcomplicatedmethod,thusnotbeingusedwidely.ServiceDepartment1ServiceDepartment2ProductionDepartment1ProductionDepartment2Step3Developequationsforeachservicedepartmentfullyrecognizingallthereciprocalrelationships.AllocateReciprocalCoststoProductionDepartment.Step2Step135CostandManagementAccountingReciprocalMethodComputethesimultaneousequationsandgetthetotalcostsofeachservicedepartment.CostandManagementAccountingReciprocalMethod--Example

ServiceDeparmentsProductionDepartmentsStoreroomCafeteriaMachiningAssemblyDepartmentCostsBeforeAllocation$60000$350000$500000$700000SquareFeetOccupied250055006000085000

NumberofEmloyees5102030AllocationBaseStoreroom:SquareFeetOccupiedCafeteria:NumberofEmployeesCostandManagementAccountingReciprocalMethod--ExampleServiceDeparmentsProductionDepartmentsStoreroomCafeteriaMachiningAssemblyDepartmentCostsBeforeAllocation$60000$350000$500000$700000StoreroomAllocation???CafeteriaAllocation???TotalAfterAllocation????HowmuchoftheCafeteriaandStoreroomcostsshouldbeallocatedtoeachproducingdepartmentunderreciprocalmethod?CostandManagementAccountingReciprocalMethod--Example

ServiceDeparmentsProductionDepartmentsStoreroomCafeteriaMachiningAssemblyDepartmentCostsBeforeAllocation$60000$350000$500000$700000SquareFeetOccupied250055006000085000

NumberofEmloyees5102030AllocationBaseStoreroom:SquareFeetOccupiedCafeteria:NumberofEmployeesCostandManagementAccountingReciprocalMethod--Example

Step1:Developequations

StoreroomAllocation=$60,000+(5÷55)CafeteriaCafeteriaAllocation=$350,000+(5,500÷150500)StoreroomStep2:ComputethesimultaneousequationsTotalcostofStoreroomDepartment=$92,119(rounded)TotalcostofCafeteriaDepartment=$353,344(rounded)CostandManagementAccountingReciprocalMethod--Example

ServiceDeparmentsProductionDepartmentsStoreroomCafeteriaMachiningAssemblyDepartmentCostsBeforeAllocation$92,119$353,344$500,000$700,000StoreroomAllocation(92,119)36,725CafeteriaAllocation(353,344)??TotalAfterAllocation$0???$92,119×AllocationBase:SquareFeetOccupiedStep3:AllocateReciprocalCoststoProductionDepartmentCostandManagementAccountingReciprocalMethod--Example

ServiceDeparmentsProductionDepartmentsStoreroomCafeteriaMachiningAssemblyDepartmentCostsBeforeAllocation$92,119$353,344$500,000$700,000StoreroomAllocation(92,119)36,72552,029CafeteriaAllocation(353,344)??TotalAfterAllocation$0???$92,119×AllocationBase:SquareFeetOccupiedStep3:AllocateReciprocalCoststoProductionDepartmentCostandManagementAccountingReciprocalMethod--Example

ServiceDeparmentsProductionDepartmentsStoreroomCafeteriaMachiningAssemblyDepartmentCostsBeforeAllocation$92,119$353,344$500,000$700,000StoreroomAllocation(92,119)36,72552,029CafeteriaAllocation(353,344)128,489?TotalAfterAllocation$0$0$165,214?$353,344×AllocationBase:NumberofEmployeesStep3:AllocateReciprocalCoststoProductionDepartmentCostandManagementAccountingReciprocalMethod--Example

ServiceDeparmentsProductionDepartmentsStoreroomCafeteriaMachiningAssemblyDepartmentCostsBeforeAllocation$92,119$353,344$500,000$700,000StoreroomAllocation(92,119)36,72552,029CafeteriaAllocation(353,344)128,489192,749TotalAfterAllocation$0$0$665,214$944,778$353,344×AllocationBase:NumberofEmployeesStep3:AllocateReciprocalCoststoProductionDepartmentCostandManagementAcco