ABC成本分析法(英文)课件

ABC成本分析法(英文)ABC成本分析法(英文)Evolution of ABCvConventional 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.Evolution of ABCConventional cProduct costs dont make sensevProblem:There may be no relationship between the overhead application base and the way that different products cause overhead costsvThe result:High-volume simple products are over-costed and over-pricedLow-volume complex products are under-costed and under-pricedProduct costs dont make sensePlantwide 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.Plantwide Overhead RatesCompanA two stage process isnecessary because costsare allocated to departmentsand then to products.Finishing DepartmentShipping DepartmentPainting DepartmentDepartmental Overhead RatesA two stage process isFinishinDepartment1Department2Department3Cost poolsCost poolsIndirectLaborIndirectMaterialsOtherOverheadStage One:Stage One:Costs assignedCosts assignedto poolsto poolsDepartmental Overhead RatesDepartmentDepartmentDepartmentDepartment1Department2Department3Cost poolsCost poolsStage One:Stage One:Costs assignedCosts assignedto poolsto pools Products Stage Two:Stage Two:Costs appliedCosts appliedto productsto productsDepartmental Overhead RatesIndirectLaborIndirectMaterialsOtherOverheadDepartmentDepartmentDepartmentDepartment1Department2Department3Cost 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 RatesIndirectLaborIndirectMaterialsOtherOverheadDepartmentDepartmentDepartmentCost Distortions caused by 2-stage allocationsvThere is a no link between the cause of support activity costs and the basis for assigning these costs to productsvWhy?1.Allocations are based on unit or volumerelated measures.2.Different products consume different amounts of support activities.Cost Distortions caused by 2-sQuestionable profit marginsvTo compete in the marketplace,some companies have had to cut the prices of high volume popular items.vButThey have been able to achieve high mark-ups on low volume specialty products.Questionable profit marginsTo Erosion of company profitsvPrice cuts produce increased sales in units but decreased total revenuevHigh mark-ups on specialty products didnt offset the fall in profit margins of high volume productsErosion of company profitsPricCauses of problemsvIncreased product diversityvchanging cost structuresvuse of volume-based cost driversHave resulted in:distorted product costsCauses of problemsIncreased prSolution:Activity Based CostingvABC uses cost drivers that directly link activities performed to products made.vcost drivers are selected which measure the average demand placed on each activity by each product.vactivity cost pools are assigned to products in proportion to the way that they consume each activity.Solution:Activity Based CostiSolution:Activity Based CostingvACTIVITIES CONSUME RESOURCESvPRODUCTS CONSUME ACTIVITIESvActivities are used to link resource costs to productsSolution:Activity Based CostiActivity 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!Activity Based Costing(ABC)ThOverhead 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.Overhead rates mayActivity BasHow Costs are Treated Under Activity-Based CostingLevel of ComplexityLevel of ComplexityOverhead Allocation Plantwide OverheadRateDepartmentalOverheadRatesActivity BasedCostingHow Costs are Treated Under AcActivity-based costingvis a way of measuring both the cost of cost objects and the performance of activitiesvcan help solve problems such as distorted product costspoor cost controlvthe form of ABC adopted depends on the problems that need to be addressedActivity-based costingis a wayDesigning an ABC SystemCost Objects(e.g.,productsand customers)ActivitiesConsumptionof ResourcesCostDesigning an ABC SystemCost ObABC成本分析法(英文)课件Identifying and Defining ActivitiesAn ACTIVITY is a part of the productionprocess for which managementwants a separate reporting ofcosts.Unit-LevelActivitiesBatch-Level ActivitiesProduct-sustainingActivitiesFacility-sustainingActivitiesIdentifying and Defining ActivOutput 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?Output Unit-Level Costs.are 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 will depend on the number set-ups carried out i.e.on the number of batches produced and the time each set-up takes.Batch-Level Costs.are resourProduct-Sustaining.(or service-sustaining)costs are resources sacrificed on activities 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.Product-Sustaining.(or serviFacility-Sustaining Costs.are resources sacrificed on activities that cannot be traced to individual products or services but which support the organization as a whole.vGeneral administrationrentbuilding securityCEOs salaryFacility-Sustaining Costs.arDifferent forms of ABCvSimple approach-includes manufacturing overhead onlyvABC system for all indirect costs-includes manufacturing and non-manufacturing costsvComprehensive system-includes all product-related costs,except direct materialDifferent forms of ABCSimple aThe 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 orders,andCustomers.One overhead cost-shipping-can be traced directly to customer orders.The companys activity cost pools are shown on the next slide.The Mechanics of ABCClassic BrStep 1:Identify and Define Activities and Activity Cost PoolsAt Classic Brass,the ABC team,selected the following activity cost pools and activity measures:Step 1:Identify and Define AcStep 1:Identify and Define Activities and Activity Cost PoolsvvCustomer OrdersCustomer Orders-assigned all costs of resources -assigned all costs of resources that are consumed by taking and processing that are consumed by taking and processing customer orders.customer orders.vvProduct DesignsProduct Designs-assigned all costs of resources -assigned all costs of resources consumed by designing products.consumed by designing products.vvOrder SizeOrder Size-assigned all costs of resources -assigned all costs of resources consumed as a consequence of the number of units consumed as a consequence of the number of units produced.produced.vvCustomer RelationsCustomer Relations assigned all costs associated assigned all costs associated with maintaining relations with customers.with maintaining relations with customers.vvOtherOther assigned all overhead costs that are not assigned all overhead costs that are not associated with the other cost pools.associated with the other cost pools.Step 1:Identify and Define AcStep 2:Whenever Possible,Directly Trace Overhead Costs to Activities and Cost ObjectsStep 2:Whenever Possible,DirStep 3:Assign Costs to Activity Cost PoolsAt Classic Brass the following distribution of resource consumption across activity cost pools is determined.*Not included because they are directly traced to customer orders.Step 3:Assign Costs to ActiviIndirect factory wages$500,000Indirect factory wages$500,000Percent consumed by customer orders 25%Percent consumed by customer orders 25%$125,000$125,000Step 3:Assign Costs to Activity Cost PoolsIndirect factory wages Factory equipment depreciation$300,000Factory equipment depreciation$300,000Percent consumed by customer orders 20%Percent consumed by customer orders 20%$60,000$60,000Step 3:Assign Costs to Activity Cost PoolsFactory equipment depreciationStep 3:Assign Costs to Activity Cost PoolsStep 3:Assign Costs to ActiviStep 4:Calculate Activity RatesDirectMaterialsDirectLaborShippingCostsOverhead CostsTracedTracedTracedCost Objects:Products,Customer Orders,CustomersStep 4:Calculate Activity RatStep 4:Calculate Activity RatesDirectMaterialsDirectLaborShippingCostsOrderSizeCustomerOrdersProductDesignCustomerRelationsOtherOverhead CostsCost Objects:Products,Customer Orders,CustomersFirst-Stage AllocationStep 4:Calculate Activity RatStep 4:Calculate Activity RatesDirectMaterialsDirectLaborShippingCostsCost Objects:Products,Customer Orders,CustomersOrderSizeCustomerOrdersProductDesignCustomerRelationsOtherOverhead CostsFirst-Stage AllocationSecond-Stage Allocations$/MH$/Order$/Design$/CustomerUnallocatedStep 4:Calculate Activity RatStep 4:Calculate Activity RatesThe ABC team estimates that Classic Brass will have the following total activities for each activity cost pool.1,000 customer orders,200 new designs,20,000 machine-hours100 customers.Now the team can compute the individual activity rates by dividing the total cost for each activity by the total activity levelsStep 4:Calculate Activity RatStep 4:Calculate Activity RatesAfter the first-stage allocation is complete,computation of activity rates for each activity cost pool can be done as follows:Step 4:Calculate Activity RatStep 5:Assign Costs to Cost ObjectsLets take a look at how our system works for just one customer Windward Yachts.Standard Stanchions(no design required)1.400 units ordered with 2 separate orders.1.400 units ordered with 2 separate orders.2.Each stanchion required 0.5 machine-hours.2.Each stanchion required 0.5 machine-hours.3.Selling price is$34 each.3.Selling price is$34 each.4.Direct materials total$2,110.4.Direct materials total$2,110.5.Direct labor totals$1,850.5.Direct labor totals$1,850.6.Shipping costs total$180.6.Shipping costs total$180.Custom Compass Housing(requires new design)1.One order during the year.1.One order during the year.2.Each housing required 4 machine-hours.2.Each housing required 4 machine-hours.3.Selling price is$650 each.3.Selling price is$650 each.4.Direct materials total$13.4.Direct materials total$13.5.Direct labor totals$50.5.Direct labor totals$50.6.Shipping costs total$25.6.Shipping costs total$25.Step 5:Assign Costs to Cost OStep 5:Assign Costs to Cost ObjectsThe customer-level The customer-level cost is assigned to cost is assigned to customers directly;customers directly;it is not assigned to it is not assigned to products.products.Step 5:Assign Costs to Cost OStep 6:Prepare Management ReportsStep 6:Prepare Management RepStep 6:Prepare Management ReportsStep 6:Prepare Management RepStep 6:Prepare Management ReportsCustomer Profitability AnalysisStep 6:Prepare Management RepProduct MarginsTraditional Cost Accounting System(MH=machine Cost Accounting System(MH=machine hour)hour)Predetermined manufacturingoverhead rate$1,000,000 20,000 MH=$50/MH=400 400 units x 0.5 MH/unit x$50/MH=$10,000units x 0.5 MH/unit x$50/MH=$10,000Product MarginsTraditional CosDifferences Between ABC and Traditional Product CostingABC will ordinarily shift ABC will ordinarily shift overhead costs from overhead costs from high-volume products high-volume products produced in large produced in large batches to low-batches to low-volume products volume products produced in small produced in small batches.batches.Under ABC both Under ABC both manufacturing and manufacturing and nonmanufacturing nonmanufacturing costs may be assigned costs may be assigned to products.to products.Organization-sustaining Organization-sustaining costs and the costs of costs and the costs of idle capacity are not idle capacity are not assigned to products.assigned to products.Differences Between ABC and TrActivity-based versus conventional product costsvConventional costing assumes product costs are driven by volume-based cost driversvConventional costing ignores batch size-units produced in large batches consume a relatively low amount per unit of batch costs vABC can include non-manufacturing costsActivity-based versus conventiABC benefits will be greatest where.vOverhead costs are a significant proportion of total cost,and a large part of overhead is not directly related to production volumevThe business has a diverse product range,and the individual products use of support resources differs from their use of volume-based cost driversABC benefits will be greatest ABC benefits will be greatest where.vProduction activity involves diverse batch sizes and product complexity.vThere are likely to be high costs associated with making inappropriate decisions,based on inaccurate product costs.vThe cost of designing,implementing and maintaining an ABC system is relatively low due to sophisticated IT supportABC benefits will be greatest Impediments to introducing ABCvLack of awareness of ABCvUncertainty about the potential benefits from ABCvFirms understand the need for change but are concerned about the extensive resource requirements to implement ABCvResistance to change among managers and employeesReading by Booth and GiacobbeImpediments to introducing ABCOther activity-based costing issuesvSources of variations in types of ABC include whetheractual(past)or budgeted costs are analysedthe implementation is a one-off project or an on-going systemcost objects,other than products,are includedOther activity-based costing iOther activity-based costing issuesvImplications of excess capacityABC estimates the cost of resources used to perform activities to produce and sell products,which may not always equal the cost of resources suppliedneed to account for the costs of unused capacity when budgeted costs have been used to generate activity-based product costsOther activity-based costing iOther activity-based costing issuesvBehavioural issues change can be perceived as threateningvABC may require changes in data collected and collection and analysis proceduresbottom-up change management may give some degree of ownership of any changes caused by ABCmanagement must be seen as committed to the change processOther activity-based costing iLimitations of activity-based costingvIf a high level of facility-level costs are allocated to products,this can lead to an arbitrary element of product costvUnitised batch,product and facility-level costs can lead to product costs that are of limited use for decision makingvThe cost of updating an ABC system can be very high,but this is needed to avoid producing outdated,irrelevant informationLimitations of activity-based Activity-based costing in service organisationsvABC can be difficult to implement in service firms,becausehigh levels of facility costs cause problems with costing servicesindividual activities are difficult to identify because they are non-repetitivea non-repetitive production environment makes it difficult to identify service outputsActivity-based costing in servActivity-based management(ABM)vProcess of using information from activity-based costing to analyse activities,cost drivers and performance so that customer value and profitability are improvedvCustomer valuethe features of a product which customers are willing to pay Activity-based management(ABMUsing ABM to reduce costsvIdentify the major opportunities for cost reductionvDetermine the real causes of these costsvDevelop a program to eliminate the causes,and,therefore,the costsvIntroduce performance measures to monitor the effectiveness of cost reduction effortsUsing ABM to reduce costsIdentIdentifying the major opportunities for cost reductionvValue-added activitiesessential to the customer,or businessvNon-value-added activitiescan be eliminated without detriment to either the customers or the businessIdentifying the major opportunValue-Added CostsvA 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 keyboardsValue-Added CostsA value-addedNon-value-added costsvA 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 timeNon-value-added costsA non-valActivity-Based Management vABM can be used forvProduct pricing and mix decisionsvCost reduction and process improvement decisionsvDesign decisionsActivity-Based Management ABM Product Pricing and Mix DecisionsvABC gives management insight into the cost structures for making and selling a diverse range of products.vIt provides more accurate product cost information and more detailed information on costs of activities and the drivers of those costs.Product Pricing and Mix DecisiCost Reduction and Process Improvement DecisionsvManufacturing and distribution personnel use ABC systems to focus on cost reduction efforts.vManagers set cost-reduction targets in terms of reducing the cost per unit of the cost-allocation base.Cost Reduction and Process ImpDesign DecisionsvManagement can identify and evaluate new designs to improve performance by evaluating how product and process designs affect activities and costs.vCompanies can work with their customers to evaluate the costs and prices of alternative design choices.Design DecisionsManagement canJust-In-Time Production SystemsvJust-in-time(JIT)production systems take a“demand pull”approach in which goods are only manufactured when needed to satisfy customer orders.vDemand triggers each step of the production process,starting with customer demand for a finished product at the end of the process,to the demand for direct materials at the beginning of the process.Just-In-Time Production SystemMajor Features of a JIT SystemvThe five major features of a JIT system are:vOrganizing production in manufacturing cellsvHiring and retaining multi-skilled workersvEmphasizing total quality managementvReducing manufacturing lead time and setup timevBuilding strong supplier relationshipsMajor Features of a JIT SystemKey features of JIT production1.A pull method of co-ordinating production which uses kanbans.Kanban is the Japanese term for card or visible record.Nothing is manufactured at any stage until its need is signalled from the subsequent stage,via a kanban.2.Simplified production processes.Non-value-added activities are identified and removed.Key features of JIT productionKey features of JIT production3.Purchase of materials,and manufacture of sub-assemblies and products in small lotsBatch sizes tend to be small and inventory levels are low.4.Quick and inexpensive setups of production machinery.To produce in small batches setup times must be reduced.Key features of JIT productionKey features of JIT production5.High-quality levels for raw materials,components and finished products6.Effective preventative maintenance of equipment7.Flexible work teamsMany firms have moved from rigid assembly lines towards work-based team made up of multi-skilled employees.Key features of JIT productionCosts of JITvSubstantial investment is needed to change the production faci