MANAGERIAL ACCOUNTING CONCEPTS AND PRINCIPLES.ppt

1、Chapter 18,Managerial Accounting Concepts and Principles,Managerial Accounting Basics,C 1,Purpose of Managerial Accounting,C 1,Nature of Managerial Accounting,C 1,Managerial Accounting,C 6,Quality improvement applied to all aspects of business activities.,Seek and uncover waste.,Employees encouraged

2、to try new methodsto improve quality.,Company emphasizesvalue of quality throughquality awards.,Total Quality Management,C 6,Constant Focus on Higher Standards,Complete productsjust-in-time toship to customers.,Complete partsjust-in-time forassembly into products.,Schedule Production.,Receive materi

3、alsjust-in-time forproduction.,Receivecustomerorders.,Just-In-Time (JIT) Manufacturing,C 6,Implications forManagerial Accounting,C 6,Fraud and Ethics inManagerial Accounting,Fraud Involves the use of ones job for personal gain through the deliberate misuse of the employers assets. Is done to provide

4、 direct or indirect benefit to the employee. Violates the employees duties to his employer. Costs the employer money. Is secret. Increases business costs.,The Institute of Management Accountants has issued a code of ethics to help accountants involved in solving ethical dilemmas.,C 1,Types of Cost C

5、lassificationsClassification by Behavior,Cost behavior refers to how a cost will react to changes in the level of business activity. Total fixed costs donot change when activity changes. Total variable costs change in proportionto activity changes. Mixed costs are combinations of fixed and variable

6、costs.,C 2,Direct costs Costs traceable to a single cost object. Examples: material and labor cost for a product.,Indirect costs Costs that cannotbe traced to asingle cost object. Example: A maintenance expenditurebenefiting two ormore departments.,Types of Cost Classifications Classification by Tra

7、ceability,C 2,The degree of control depends on thelevel of management in the organization.,Types of Cost Classifications Classification by Controllability,C 2,Types of Cost Classifications Classification by Relevance,Sunk costs have already been incurred and cannot be avoided or changed. Sunk costs

8、should not be considered in decisions. Example: An automobile purchased two years ago cost $15,000. The $15,000 cost is sunk because whether the car is driven, sold, traded, or abandoned, the cost will not change.,Out-of-pocket costs require future outlays of cash and should be considered in decisio

9、ns. Example: You plan on buying a new car for $25,000 next month. The cost of the new car is an out-of-pocket cost because you can choose to spend or not to spend the $25,000 next month.,C 2,Types of Cost Classifications Classification by Relevance,An opportunity cost is the potential benefit lost b

10、y choosing a specific action from two or more alternatives,C 2,Example: If you were not attending college, you could be earning $20,000 per year. Your opportunity cost of attending college for one year is $20,000.,Product,Types of Cost Classifications Classification by Function,DirectLabor,DirectMat

11、erial,Manufacturing Overhead,C 3,Period and Product Costsin Financial Statements,C 3,Identifications of Cost Classifications,C 3,Cost Concepts forService Companies,C 3,The cost concepts described are generally applicable to service organizations.,For example, the cost of beverages for passengers of

12、Southwest Airlines is a variable cost based on number of passengers.,Merchandisers . . . Buy finished goods. Sell finished goods.,SaleMart,Manufacturers . . . Buy raw materials. Produce and sell finished goods.,Reporting Manufacturing Activities,C 4,Manufacturers Balance Sheet,Materialswaiting to be

13、processed. Can be direct or indirect.,RawMaterials,FinishedGoods,Goods inProcess,C 4,MERCHANDISER Current Assets Cash Receivables Merchandise Inventory,MANUFACTURER Current Assets Cash Receivables Inventories Raw Materials Goods in Process Finished Goods,The primary difference is inventory.,Manufact

14、urers Balance Sheet,C 4,Manufacturers Income Statement,P 1,Cost of Goods sold for aMerchandiser and Manufacturer,P 1,Cost of goods sold for manufacturers differs only slightly from cost of goods sold for merchandisers.,Direct Materials,P 1,Direct material costs are the expenditures for direct materi

15、als that are separately and readily traced through the manufacturing process to finished goods.,Example: Wages paid to amountain bike assembly worker.,Direct Labor,P 1,Direct labor costs are the wages and salaries for direct labor that are separately and readily traced through the manufacturing proc

16、ess to finished goods.,Examples: Indirect labor maintenance Indirect material cleaning suppliesFactory utility costsSupervisory costs,Factory Overhead,P 1,Factory overhead consists of all manufacturing costs that are not direct materials or direct labor and the costs cannot be separately or readily

17、traced to finished goods.,DirectMaterial,DirectLabor,ManufacturingOverhead,PrimeCost,ConversionCost,Manufacturing costs are oftencombined as follows:,Prime and Conversion Costs,P 1,Activities and Cost Flowsin Manufacturing,C 5,Summarizes the types and amounts of costs incurred in a companys manufact

18、uring process.,Manufacturing Statement,Direct Materials Used +Direct Labor +Factory Overhead =Total Manufacturing Costs +Beginning Work in Process Ending Work in Process =Cost of Goods Manufactured,P 2,Manufacturing Statement,P 2,P 2,Manufacturing Statement,Include all direct labor costs incurred du

19、ring the current period.,Manufacturing Statement,P 2,Manufacturing Statement,P 2,Manufacturing Statement,P 2,Overhead Cost Flows Across Accounting Reports,P 2,Process time is the only value-added time.,Wait Time,Process Time + Inspection Time+ Move Time + Queue Time,Total Cycle Time,Manufacturing Cy

20、cle Time,Cycle Time and Cycle Efficiency,A 1,Cycle Time and Cycle Efficiency,Wait Time,Process Time + Inspection Time+ Move Time + Queue Time,Manufacturing Cycle Time,Total Cycle Time,A 1,End of Chapter 18,Chapter 19,Job Order Cost Accounting,Used for production of large, unique, or high-cost items.

21、 Built to order rather than mass produced. Many costs can be directly traced to each job.,Cost Accounting Systems,Chapter 20,C 1,Typical job order cost applications: Special-order printing Building construction Also used in service industry Hospitals Law firms,Chapter 20,Job Order Production,C 1,Rec

22、eive order from customer.,Predict cost to complete job.,Negotiate a sales price and decide whether to pursue the job.,Schedule production of the job.,Events in Job Order Costing,C 1,Goods in Process,Labor,Materials,Indirect,Indirect,FactoryOverhead,Direct,Direct,Allocate,JOB ORDER PRODUCTION ACTIVIT

23、IES,C 1,Job Order Cost Documents,The primary document for tracking the costs associated with a given job is the job cost sheet.,C 2,Job Cost Sheet,C 2,Job Cost Sheet,Lets see one,A materials requisition is used to authorize the use of materials on a job.,C 2,Materials Requisition,C. Luther,P 1,C. Lu

24、ther,Materials Requisition,Properauthorization,Cost of material is charged to Job B15.,P 1,C. Luther,Materials Requisition,Type and quantity of material charged to Job B15.,Pre-printed, sequentially numbered form,P 1,C. Luther,Materials Requisition,The materials requisition form also serves as the s

25、ource document for recording material usage in the accounting records.,P 1,Materials Ledger Card,P 1,Job Cost Sheet,P 1,Job Cost Sheet,P 2,Labor Time Ticket,C. Luther,P 2,Job Cost Sheet,P 2,Job Cost Sheet,P 3,Job Cost Sheet,P 3,Road Warriors uses a predetermined overhead rate (POHR) based on direct

26、labor cost to apply overhead to jobs.,Predetermined Overhead Rate,P 3,Job Order Cost Flows and Reports,Lets summarize the document flow we have been discussing in a job-order costing system.,Materials Ledger Cards,Materials Ledger Cards,Materials Ledger Cards,MaterialsRequisition,Direct materials,Th

27、e materials requisition indicates the cost of direct materialsto charge tojobsand the cost of indirect materials to charge to overhead.,Indirect materials,Material Cost Flows and Documents,P 1,Employee time tickets indicate the cost of direct laborto charge tojobsand the cost of indirect labor to ch

28、arge to overhead.,Job Cost Sheets,Factory Overhead Account,Job Cost Sheets,Job Cost Sheets,Job Cost Sheets,Direct Labor,Indirect Labor,Employee Time Ticket,Employee Time Ticket,Employee Time Ticket,Employee Time Ticket,Labor Cost Flows and Documents,P 2,Summary of Cost Flows,Lets examine the cost fl

29、ows in a job order system.We will useT-accounts and start with materials.,Material Purchases,Dr Cr,Dr Cr,Dr Cr,Summary of Cost Flows,P 1,Incurred,DirectMaterial,Dr Cr,Dr Cr,Dr Cr,Summary of Cost Flows,P 2,P 3,DirectMaterialDirectLaborOverhead,Dr Cr,Dr Cr,Dr Cr,Summary of Cost Flows,P 3,Overhead Application,P 4,Overhead Application,Reasons for using a POHR(predetermined overhead rate),P 4,Adjustment of Overapplied or Underapplied Overhead,P 4,Adjustment of Overapplied or Underapplied Overhead,P 4,Adjustment of Overapplied or Underapplied Overhead,P 4,Adjusting Cost of Goods