成本分析法(英文版)(ppt页)

Topic 6 Activity-Based CostingMAA 703Management AccountingEvolution of ABCConventional 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 using a volume-based predetermined overhead rate.Product costs dont make senseProblem:There may be no relationship between the overhead application base and the way that different products cause overhead costsThe result:High-volume simple products are over-costed and over-pricedLow-volume complex products are under-costed and under-pricedPlantwide Overhead RatesCompanies have tended to use direct labour 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 are now done by automated equipment.A two stage process isnecessary because costsare allocated to departmentsand then to products.Finishing DepartmentShipping DepartmentPainting DepartmentDepartmental Overhead RatesDepartment1Department2Department3Cost poolsCost poolsIndirectLaborIndirectMaterialsOtherOverheadStage One:Stage One:Costs assignedCosts assignedto poolsto poolsDepartmental Overhead RatesDepartment1Department2Department3Cost poolsCost poolsStage One:Stage One:Costs assignedCosts assignedto poolsto pools Products Stage Two:Stage Two:Costs appliedCosts appliedto productsto productsDepartmental Overhead RatesIndirectLaborIndirectMaterialsOtherOverheadDepartment1Department2Department3Cost poolsCost poolsStage One:Stage One:Costs assignedCosts assignedto poolsto pools Products Stage Two:Stage Two:Costs appliedCosts appliedto productsto productsDirect Labour HoursMachineHoursRawMaterialsCostDepartmental Allocation BasesDepartmental Overhead RatesIndirectLaborIndirectMaterialsOtherOverheadCost Distortions caused by 2-stage allocationsThere is a no link between the cause of support activity costs and the basis for assigning these costs to productsWhy?1.Allocations are based on unit or volumerelated measures.2.Different products consume different amounts of support activities.Questionable profit marginsTo compete in the marketplace,some companies have had to cut the prices of high volume popular items.ButThey have been able to achieve high mark-ups on low volume specialty products.Erosion of company profitsPrice cuts produce increased sales in units but decreased total revenueHigh mark-ups on specialty products didnt offset the fall in profit margins of high volume productsCauses of problemsIncreased product diversitychanging cost structuresuse of volume-based cost driversHave resulted in:distorted product costsSolution:Activity Based CostingABC uses cost drivers that directly link activities performed to products made.cost drivers are selected which measure the average demand placed on each activity by each product.activity cost pools are assigned to products in proportion to the way that they consume each activity.Solution:Activity Based CostingACTIVITIES CONSUME RESOURCESPRODUCTS CONSUME ACTIVITIESActivities are used to link resource costs to productsActivity 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 agood supplement to our traditional cost systemI agree!Overhead rates maybe based on activityat capacity.Activity Based Costing(ABC)Activity-Based CostingBoth manufacturingand nonmanufacturingcosts may be assigned toproducts.Some manufacturingcosts may be excludedfrom productcosts.There are a numberof cost pools,each ofwhich is allocatedusing a uniquemeasure of activity.Allocation bases oftendiffer fromtraditional costingsystems.How Costs are Treated Under Activity-Based CostingLevel of ComplexityLevel of ComplexityOverhead Allocation Plantwide OverheadRateDepartmentalOverheadRatesActivity BasedCostingActivity-based costingis a way of measuring both the cost of cost objects and the performance of activitiescan help solve problems such as distorted product costspoor cost controlthe form of ABC adopted depends on the problems that need to be addressedDesigning an ABC SystemCost Objects(e.g.,productsand customers)ActivitiesConsumptionof ResourcesCostIdentifying and Defining ActivitiesAn ACTIVITY is a part of the productionprocess for which managementwants a separate reporting ofcosts.Unit-LevelActivitiesBatch-Level ActivitiesProduct-sustainingActivitiesFacility-sustainingActivitiesOutput Unit-Level Costs.are resources sacrificed on activities performed on each individual unit of product or service e.g.Energy used by machinesMachine depreciation or repairsThe Key Question:Does the amount of the activity cost pool increase with the number of units produced?Batch-Level Costs.are resources sacrificed on activities that are related to a batch of units rather than to each individual unit of product or service.Set-up activity costs may be driven by set-up hours.This wil