Upload
florensia-restian
View
240
Download
0
Embed Size (px)
Citation preview
8/11/2019 Ch07 Guan Cm Aise Ppt
1/40
COST MANAGEMENT
COPYRIGHT 2009 South-Western Publishing, a i!ision o" Cengage #earning$Cengage #earning an South-Western are trae%ar&s use herein uner li'ense$
(
Guan Hansen Mowen
Chapter 7
Allocating Costs ofSupport Departmentsand Joint Products
8/11/2019 Ch07 Guan Cm Aise Ppt
2/40
2
Study Objectives
1. Describe the difference between support departmentsand producin departments.
2. !a"cu"ate charin rates# and distinuish betweensin"e and dua" charin rates.
$. %""ocate support center costs to producin departmentsusin the direct method# the se&uentia" method# and thereciproca" method.
'. !a"cu"ate departmenta" overhead rates.
(. )dentify the characteristics of the joint productionprocess# and a""ocate joint costs to products.
8/11/2019 Ch07 Guan Cm Aise Ppt
3/40
$
%n Overview of !ost %""ocation
* %""ocation is dividin a poo" of costs andassinin those costs to subunits
*+he cost objects must be determined* !ost objects are usua""y departments
, -roducin creatin products so"d tocustomers
, Support provide essentia" services forproducin departments
8/11/2019 Ch07 Guan Cm Aise Ppt
4/40
'
Departmenta"i/ationManufacturin 0irm
8/11/2019 Ch07 Guan Cm Aise Ppt
5/40
(
Departmenta"i/ationService 0irm
8/11/2019 Ch07 Guan Cm Aise Ppt
6/40
%""ocatin Support Department!osts to -roducin Departments
* Departmenta"i/e the firm
* !"assify each department as support or producin
* +race a"" overhead costs in the firm to the appropriatedepartment
* %""ocate support department costs to producindepartments
* !a"cu"ate predetermined overhead rate for producindepartments
* %""ocate overhead to units produced
Steps:
8/11/2019 Ch07 Guan Cm Aise Ppt
7/40
%n Overview of !ost %""ocation
8/11/2019 Ch07 Guan Cm Aise Ppt
8/40
3
%""ocatin One Department4s !oststo %nother Department
* +he costs of a support department areoften a""ocated throuh the use of acharging rate.
* Major factors of rate se"ection
, !hoice of sin"e or dua" rate
, 5se of budeted or actua" support departmentcosts.
8/11/2019 Ch07 Guan Cm Aise Ppt
9/40
6
%""ocatin One Department4s !oststo %nother Department
* Deve"opin a fi7ed rate, Determine budeted fi7ed costs
, !ompute a""ocation ratio,%""ocate
* Deve"opin the variab"e rate, Depends on the costs that chane as the activity
driver chanes
0i7ed costs 8 estimated variab"e costsSin"e 9rate estimated usae
Dua" rate 0i7ed rate and a variab"e rate
8/11/2019 Ch07 Guan Cm Aise Ppt
10/40
1:
%""ocatin One Department4s !oststo %nother Department
;hen a""ocatin support department costs#shou"d actua" or budeted costs bea""ocateddirect8 a""ocated? based on maintenance@hours
( )'#(:: Grindin
C21:#::: 9 C1:(#:::'#(:: '#(::8
Grindin %ssemb"y
+o Grindin
Costs to allocate: $16! "irect # $! allocate" % $&1!
+o %ssemb"y( )'#(:: %ssemb"y
C21:#::: 9 C1:(#:::'#(:: '#(::8
Grindin %ssemb"y
8/11/2019 Ch07 Guan Cm Aise Ppt
20/40
2:
Se&uentia" a""ocation
8/11/2019 Ch07 Guan Cm Aise Ppt
21/40
21
Beciproca" a""ocation
8/11/2019 Ch07 Guan Cm Aise Ppt
22/40
22
Beciproca" a""ocation
M 9 C1:#::: 8 .2-M 9 C1:#::: 8 .2>2(:#::: 8 .1M?
M 9 C1:#::: 8 (:#::: 8 .:2M.:6M 9 C21:#:::M 9 C21'#23
5ti"i/e a series of simu"taneous "inear e&uations
- 9 C2(:#::: 8 .1-- 9 C2(:#::: 8 .1>21'#23?- 9 C2(:#::: 8 21#'26
- 9 C21#'26
8/11/2019 Ch07 Guan Cm Aise Ppt
23/40
2$
Beciproca" a""ocation
M 9 C1:#::: 8 .2-M 9 C1:#::: 8 .2>2(:#::: 8 .1M?
M 9 C1:#::: 8 (:#::: 8 .:2M.63M 9 C21:#:::M 9 C21'#23
5ti"i/e a series of simu"taneous "inear e&uations
- 9 C2(:#::: 8 .1-- 9 C2(:#::: 8 .1>21'#23?- 9 C2(:#::: 8 21#'26
- 9 C21#'26
8/11/2019 Ch07 Guan Cm Aise Ppt
24/40
2'
Beciproca" a""ocation
M 9 C1:#::: 8 .2-M 9 C1:#::: 8 .2>2(:#::: 8 .1M?
M 9 C1:#::: 8 (:#::: 8 .:2M.63M 9 C21:#:::M 9 C21'#23
5ti"i/e a series of simu"taneous "inear e&uations
- 9 C2(:#::: 8 .1-- 9 C2(:#::: 8 .1>21'#23?- 9 C2(:#::: 8 21#'26
- 9 C21#'26
8/11/2019 Ch07 Guan Cm Aise Ppt
25/40
2(
Beciproca" a""ocation
8/11/2019 Ch07 Guan Cm Aise Ppt
26/40
2
!hoosin a Support Department!ost %""ocation Method
8/11/2019 Ch07 Guan Cm Aise Ppt
27/40
2
Departmenta" Overhead Batesand -roduct !ostin
%fter a""ocatin a"" support service costs toproducin departments# an overhead rate isca"cu"ated for each department
%""ocated -roducinservice departmentcosts overhead costs
Measure of activity
+
8/11/2019 Ch07 Guan Cm Aise Ppt
28/40
23
Departmenta" Overhead Batesand -roduct !ostin
% product cost can now be determined
Direct materia"s
8 Direct "abor8 %ssined overhead
-roduct cost
8/11/2019 Ch07 Guan Cm Aise Ppt
29/40
26
%ccountin for Foint-roduction -rocesses
* 'oint pro"uctsare two or more productsproduced simu"taneous"y by the sameprocess up to a sp"it@off point.
, +he sp"it@off point is the point at which the jointproducts become separate and identifiab"e.
* Separa(le costsare easi"y traced to
individua" products and offer no particu"arprob"em.
8/11/2019 Ch07 Guan Cm Aise Ppt
30/40
$:
%ccountin for Foint-roduction -rocesses
8/11/2019 Ch07 Guan Cm Aise Ppt
31/40
$1
%ccountin for Foint-roduction -rocesses
8/11/2019 Ch07 Guan Cm Aise Ppt
32/40
$2
%ccountin for Foint-roduction -rocesses
* +he distinction between joint and by@products rests so"e"y on the re"ativeimportance of their sa"es va"ue.
* % by@product is a secondary productrecovered in the course of manufacturina primary product.
, Foint costs are not typica""y a""ocated, Sa"es revenue is c"assified as other income
, -ost@sp"it@off processin costs are deductedfrom sa"es revenue
8/11/2019 Ch07 Guan Cm Aise Ppt
33/40
$$
Foint !ost %""ocation Methods
* -hysica" 5nits Method
, -resumes that each unit of the fina" productcosts as much to produce as any other
* ;eihted %verae Method
,%pp"ies weiht factors to ref"ect differinmateria"s# comp"e7ity# time# etc.
8/11/2019 Ch07 Guan Cm Aise Ppt
34/40
$'
% sawmi"" processes "os into four rades of "umberand incurs tota" joint costs of C13#:::
Foint !ost %""ocation-hysica" 5nits Method
8/11/2019 Ch07 Guan Cm Aise Ppt
35/40
$(
% peach cannin factory purchases C(#::: of peachesand rades and cans them by &ua"ity.
Foint !ost %""ocation;eihted %verae Method
8/11/2019 Ch07 Guan Cm Aise Ppt
36/40
$
Foint !ost %""ocation Methods
* Sales)*alue)at)Split)O++@Method,%""ocates joint cost based on each product4s
proportionate share of sa"es va"ue at sp"it@off
* Net Reali,a(le *alueMethod,%""ocates joint cost based on hypothetical market price
>eventua" marAet va"ue minus processin costs beyondsp"it@off?
* Constant Gross Margin -ercentageMethod,%""ocates joint costs such that the ross marin is the
same for each product
8/11/2019 Ch07 Guan Cm Aise Ppt
37/40
$
% sawmi"" processes "os into four rades of "umberand incurs tota" joint costs of C13#:::
Foint !ost %""ocationSa"es@Ia"ue@at@Sp"it@Off Method
8/11/2019 Ch07 Guan Cm Aise Ppt
38/40
$3
Foint !ost %""ocationet Bea"i/ab"e Ia"ue Method
% company manufactures two products# %"pha and =eta# from ajoint process. One production run costs C(#(: and resu"ts in1#::: a""ons of %"pha and $#::: a""ons of =eta. +he separab"ecost for %"pha is C1 per a""on and for =eta is C2 per a""on.
8/11/2019 Ch07 Guan Cm Aise Ppt
39/40
$6
Foint !ost %""ocation!onstant Gross Marin Method
Determine rossmarin percentae
Foint costa""ocation
8/11/2019 Ch07 Guan Cm Aise Ppt
40/40
COST MANAGEMENT
COPYRIGHT 2009 South-Western Publishing, a i!ision o" Cengage #earning$
)0
Guan Hansen Mowen
End Chapter 7