基礎(chǔ)會(huì)計(jì)學(xué)英文版lesson14-enManagerial Accounting Applications

Lesson

14Managerial

Accounting:ApplicationsTask

Team

ofFUNDAMENTAL

ACCOUNTINGSchool

of

Business,Sunyat-sen

UniversityOutline2

Segmented

Reporting

and

ResponsibilityAccounting

SystemBudgetary

ControlStandard

Costs

and

Variance

AnalysisManagerial

Decision

MakingIntroductionLet’s

look

at

the

XYZ

Company

example.–

A

manager

at

XYZ

Company

wants

to

replace

an

oldmachine

with

a

new,

more

efficient

machine.3IntroductionXYZ’s

sales

are

$2000000

per

year.Fixed

expenses,

other

than

amortization,

are$700000

per

year.Should

the

manager

purchase

the

new

machine?4Introduction

The

manager

recommends

that

the

companynot

purchase

the

new

machine

since

disposalof

the

old

machine

would

result

in

a

loss:5IntroductionIs

it

correct?

What’s

your

comment

to

themanager’s

decision?

After

learning

this

chapter,

youwill

know

how

to

employ

thetools

of

managerial

accountingand

make

decisions

correctly.6Segment

Reporting7

Organizations

may

break

down

theiroperations

into

various

segmentsdivisions,

stores,

services,

or

departments.

Management

needs

reports

on

each

segmentforcost

managementperformance

evaluationSegment

ReportingSegments

may

be

evaluated

asa

cost

centrea

profit

centre

Profit

centre

reports

include

information

on

asegment’s

revenues

and

costs.an

investment

centre.Some

costs

are

direct

and

some

are

indirect.Indirect

costs

may

be

allocated

to

variousdepartments.8Segment

ReportingService

department

costs

are

shared

indirectexpenses

of

operation

departments.They

may

be

allocated

using

a

variety

of

bases.9Responsibility

Accounting

System10Responsibility

Accounting

SystemAn

accounting

systemassigns

managers

the

responsibility

forcosts

and

expenses

under

their

control.Responsibility

Accounting

System11Responsibility

accounting

budgetsare

prepared

prior

to

each

accounting

period

Responsibility

accounting

performancereportscompare

actual

costs

and

expenses

to

budgetedamountsCost-Volume-Profit

Analysis(CVP)12CVP

analysis

is

used

to

answer:How

much

must

I

sell

to

earn

my

desired

income?How

will

income

be

affected

if

I

reduce

sellingprices

to

increase

sales

volume?How

will

income

be

affected

if

I

change

the

salesmix

of

my

products?……?Assumptions

of

CVP

Analysis13

CVP

analysis

assumes

relations

can

beexpressed

as

straight

lines

within

the

relevrange.√Unit

selling

price

remains

constant.√Unit

variable

costs

remain

constant.√Total

fixed

cost

remain

constant.

If

the

expected

cost

and

revenue

behaviour

isdifferent

from

the

assumptions,

then

the

results

ofCVP

analysis

are

of

limited

use.Scatter

Diagram14Unit

Variable

Cost

=

Slope

=Verticaldistance

isthe

changein

cost.14High-Low

Method5*Total

Cost

in000’s

of

Dollars10200***

***

***Activity,

1,000’s

of

Units

Sold1530Verticaldistance

isthe

changein

cost.

(30-

20)Horizontal

distance

isthe

change

inactivity.(5

-

1)0

1

2

3

4Unit

Variable

Cost=

30

-

205

-

1=

$2.50/unitLeast-Squares

Regression16Break-Even

Analysis

The

break-even

point

isthe

unique

sales

level

atwhich

a

companyneitherearns

a

profit

nor

incurs

aloss.SalesVolume

in

UnitsCosts

and

ReveTnTnouteal

costsin

Dollars17Break-Even

Analysis

The

break-even

point

may

be

expressed

inunits

or

in

dollars

of

sales.Fixed

CostsBreak-even

point

in

units

=Contribution

margin

per

unitUnit

sales

price

less

unit

variable

cost18Break-Even

Analysis

The

break-even

formula

may

also

beexpressed

in

sales

dollars.Unit

sales

priceUnit

variable

costBreak-even

point

in

dollars

=Contribution

margin

ratioFixed

Costs19Computing

Income

fromExpected

Sales

What

is

the

income

given

a

predicted

level

ofsales?or20Sales

Volume

Needed

toEarn

a

Target

Income

Break-even

formulas

can

be

adjusted

toshow

the

sales

volume

needed

to

earn

anyamount

of

income.21Margin

of

SafetyMargin

of

safety–

How

much

sales

can

decrease

before

thecompanyincurs

a

loss?Expected

salesMargin

ofExpected

sales

-

Break-even

sales22safety

(%)

=Sensitivity

Analysis

The

effects

of

changes

in

variables

such

assales

price,

variable

costs,

and

fixed

costs

CVP

analysis

can

be

used

toshow

the

effectsof

such

changes.New

contribution

margin

ratioNew

break-even

pointin

dollarsNew

fixed

costs23=Budgets24Budgetsformal

statements

of

a

company’s

plansexpressed

in

monetary

termsattempt

to

capture

the

future

activities

of

anorganizationare

used

by

businesses,

not-for-profit,government,

educational,

and

other

types

oforganizations.Importance

of

Budgeting25Budget

Committee26Budget

CommitteeConsists

of

managers

from

all

departmentsof

the

organizationProvides

central

guidance

to

insure

that

individual

budgets

submitted

from

alldepartments

are

realistic

and

coordinated.Budget

CommitteeFlow

of

budget

data

is

a

bottom-up

process.27Budget

Cycle2005Budget

horizons

are

usually

for

one

yearbut

may

extend

for

several

years.Operating

Budget2006

2007

2008The

annual

operating

budget

may

be

divided

iquarterlyor

monthly

budgets.28Rolling

BudgetsContinuous

orRolling

BudgetThe

budget

may

be

a

twelve-monthbudget

that

rolls

forward

one

monthas

the

current

month

is

completed.200520062007200829Master

Budget30Master

BudgetA

formal,

comprehensive

planfor

the

future

of

a

companyconsists

of

several

budgets

linked

togetherto

form

a

coordinated

plan

for

the

organizationMaster

BudgetPreparesalesbudgetDevelopproductionbudgetPreparefinancialbudgets:cash

incomebalance

sheetPreparecapitalexpenditurebudgetPrepareselling

andgeneraladministrativebudgetsPreparemanufacturingbudgets:l

materiall

labourl

overhead31Sales

BudgetSales

budgetthe

starting

point

in

the

budgeting

process.Most

of

the

other

budgets

are

linked

to

the

salesbudget.Sales

personnel

are

often

involved

in

developingthe

sales

budgets.32Sales

BudgetSales

BudgetEstimated

Unit

SalesEstimated

Unit

PriceAnalysis

of

economic

and

market

conditions+Forecasts

of

customer

needs

from

marketing

personnel33Merchandise

Purchases

BudgetMerchandise

Purchases

BudgetProvides

detailed

information

about

the

purchasnecessary

to

fulfill

the

sales

budget

and

providadequate

inventories.Merchandiseinventory

tobe

purchasedBudgetedendinginventoryBudgetedsales

for

theperiodBudgetedbeginninginventory34=+_Merchandise

Purchases

Budget35The

quantity

purchased

is

affected

by:Just-in-time

inventory

systems

enable

purchases

of

smaller,

frequently

deliveredquantities.Safety

stock

inventory

systems

provide

protection

against

lost

sales

caused

by

delayin

supplier

shipments.Selling

Expense

Budget36Selling

Expense

Budgetlists

the

types

and

amounts

of

selling

expensesPredictions

of

expenses

are

based

on

the

salesbudget

and

past

experience.General

and

Administrative

Expense

Budget37General

and

Administrative

Expense

Budgetlists

the

predicted

operating

expenses

not

listethe

sales

budgetIncludes

both

cash

and

non-cash

expensesOften

prepared

by

the

officemanager

or

person

responsiblefor

general

administrationCapital

Expenditures

Budget38Capital

Expenditures

Budget–

lists

the

cash

inflows

or

outflows

pertainto

the

disposal

or

acquisition

of

capitalequipment.–

is

usually

affected

by

the

organization’long-term

plans.Cash

Budget39Cash

Budgetlists

the

expected

cash

inflows

andoutflows

for

the

perioda

tool

used

by

management

toavoid

excess

cash

balances

orcash

shortagesInformation

from

other

budgets

is

used

in

its

preparatiInformation

from

the

cash

budget

is

used

to

prepare

thebudgeted

income

statement

and

balance

sheetProduction

and

Manufacturing

Budgets40

Manufacturing

companies

need

to

prepareadditional

budgets

that

include:Production

budgetsDirect

materials

purchase

budgetsDirect

labour

budgetsManufacturing

overhead

budgetsProduction

and

Manufacturing

BudgetsProduction

and

Manufacturing

Budgets–

Provides

detailed

information

about

theproduction

necessary

to

fulfill

the

sales

budgetprovide

adequate

inventories.Number

ofunits

to

beproducedBudgetedendinginventoryBudgetedsales

forthe

periodBudgetedbeginninginventory41=+_Production

and

Manufacturing

BudgetsDirect

Materials

Budget–Provides

detailed

information

about

the

purchases

of

rmaterials

necessary

to

fulfill

the

production

budget

anprovide

adequate

inventories.Units

of

rawmaterials

tobe

purchasedMaterialsneeded

forproductionBudgetedendinginventoryBudgetedbeginninginventory=+_Cost

of

rawmaterials

tobe

purchasedUnits

of

rawmaterials

tobe

purchasedMaterial

priceper

unit

ofraw

material=×42Production

and

Manufacturing

Budgets43

Direct

Labour

and

Manufacturing

OverheadBudgets–

Provides

information

about

the

labour

andmanufacturing

overhead

costs

given

the

level

ofproduction

for

the

period.Preparing

Financial

BudgetsCashBudgetExpectedReceiptsandDisbursements44BudgetedIncomeStatementBudgetedBalanceSheetBudgetary

Control·

Take

corrective

andstrategic

actions.Develop

the

budgetfrom

planned

objectives.·

Compareactual

withbudget

andanalyze

anydifferences.·

Reviseobjectivesand

preparea

newbudget.45Capital

Budgeting46Capital

BudgetingAnalyzing

alternative

long-term

investments

anddeciding

which

assets

to

acquire

or

sell.These

decisions

require

careful

analysis

since:The

outcome

is

uncertain.Large

amounts

of

money

are

usually

involved.Investment

involves

a

long-term

commitment.

Any

decision

may

be

difficult

or

impossible

toreverse.Zero-based

Budgeting47Zero-based

Budgetingare

prepared

assuming

no

previousactivities

for

the

activities

beingplannedManagers

must

justify

the

amounts

budgeted

foreach

activityis

popular

among

government

and

non-profitorganizations.Fixed

Budget48Fixed

budgetsare

prepared

for

a

single,

predicted

level

ofactivityPerformance

evaluation

is

difficult

when

actualactivity

differs

from

the

predicted

level

of

activExample:

How

much

of

the

unfavourable

costvariance

is

due

to

higher

activity,

and

how

much

is

dueto

poor

cost

control?

To

answer

these

questions,

we

must

flex

the

budget

tothe

actual

level

of

activity.Flexible

(Variable)

Budgets49Flexible

budgetsare

prepared

after

a

period’s

activities

arecomplete.Show

revenues

and

expenses

that

should

haveoccurred

at

the

actual

level

of

activity.Reveal

cost

variances

due

to

good

cost

control

orlack

of

cost

control.Improve

performance

evaluation.Flexible

(Variable)

BudgetsFlexible

budgetsTo

prepare

a

budget

for

different

activity

levelswe

must

know

how

costs

behave

with

changes

in

activity

levelsTotal

variable

costs

change

indirect

proportion

tochanges

in

activity.–

Total

fixed

costs

remainunchanged

within

therelevant

range.Fixed50VariableStandard

Costs51Standard

Costsare

preset

costs

for

delivering

a

productor

service

under

normal

conditions.are

established

through

personnel,engineering,

and

accounting

studiesusing

past

experience.are

benchmarks

used

in

evaluatingperformance.are

often

used

in

setting

budgets.Standard

CostsExample:

A

standard

cost

card52Variance

AnalysisPrepare

standardcost

performancereportsTake

actionAnalyze

variancesInvestigate

causes53Variance

Analysis54Management

By

ExceptionStandard

cost

accounting

provides

managementwith

information

about

costs

that

differ

frombudgeted

amounts

(variances).Management

may

choose

to

focus

only

on

variancesthat

are

significant.This

approach

is

referred

to

asManagement

by

Exception.Variance

AnalysisStandard

Quanti×Actual

Quantity×Actual

PriceActual

Quantity×Standard

PriceStandard

PricPrice

VarianceAQ(AP

-

SP)AQ

=

Actual

QuantityAP

=

Actual

Price55Quantity

VarianceSP(AQ

-

SQ)SP

=

Standard

PriceSQ

=

Standard

QuantityMaterial

VariancesVariance

AnalysisActual

HoursActual

HoursStandard

Hours×××Actual

RateStandard

RateStandard

RateRate

VarianceEfficiency

VarianceAH(AR

-

SR)AH

=

Actual

HoursAR

=

Actual

Rate56SR(AH

-

SH)SR

=

Standard

RateSH

=

Standard

HoursLabour

VariancesVariance

AnalysisSpendingVarianceEfficiencyVarianceActualVariableOverheadIncurredAH

×

AVRFlexible

Budgetfor

VariableOverhead

atActual

HoursAH

×

SVRAH

AVR

SVRSH57=

Actual

Hoursof

Activity=

Actual

Variable

Overhead

Rate=

Standard

Variable

Overhead

Rate=

Standard

Hours

AllowedAppliedVariableOverhead

atStandard

HoursSH

×

SVRVariable

Overhead

VariancesVariance

AnalysisSpendingVarianceVolumeVarianceSFR

=

Standard

Fixed

Overhead

RateSH

=

Standard

Hours

Allowed58FixedOverheadAppliedSH

×

SFRActual

FixedOverheadIncurredFixedOverheadBudgetFixed

Overhead

VariancesStandard

Costs59Standard

cost

accounting

systems√

record

variances

in

the

accounts√

simplify

recordkeeping

and

help

in

thepreparation

of

reportsDiscussions60ABC

Company

has

the

following

direct

materialstandard

to

manufacture

one

unit

product:3.0

kilograms

per

unit

at

$8.00

per

kilogram

Last

week

6600

kilograms

of

material

werepurchased

and

used

to

make

2000

units.

Thematerial

cost

a

total

of

$53000.DiscussionsWhat

is

the

actual

price

per

kilogram

paid

forthe

material?$7.26

per

kilogram.$8.13

per

kilogram.$8.03

per

kilogram.$8.00

per

kilogram.61DiscussionsWhat

is

the

actual

price

per

kilogram

paid

forthe

material?$7.26

per

kilogram.$8.13

per

kilogram.$8.03

per

kilogram.$8.00

per

kilogram.AP

=

$53000

÷

6600

kgAP

=

$8.03

per

kg62DiscussionsABC’s

material

price

variance

(MPV)

for

theweek

was:$198

favourable.$198

unfavourable.$189

favourable.$189

unfavourable.63DiscussionsABC’s

material

price

variance

(MPV)

for

theweek

was:$198

favourable.$198

unfavourable.$189

favourable.$189

unfavourable.MPV

=

AQ(AP

-

SP)MPV

=6600

kg

×

($8.03

-

8.00)MPV

=

$198

unfavourable64DiscussionsThe

standard

quantity

of

material

that

shouldhave

been

used

to

produce

2000

units

is:6500

kilograms.6000

kilograms.7000

kilograms.5000

kilograms.65DiscussionsThe

standard

quantity

of

material

thatshould

have

been

used

to

produce2000

units

is:6500

kilograms.6000

kilograms.7000

kilograms.5000

kilograms.SQ

=

2000

units

×

3

kg

per

unitSQ

=

6000

kg66DiscussionsABC’s

material

quantity

variance

(MQV)

forthe

week

was:$4300

unfavourable.$4300

favourable.$4800

unfavourable.$4800

favourable.67DiscussionsABC’s

material

quantity

variance

(MQV)for

theweekwas:$4300

unfavourable.$4300

favourable.$4800

unfavourable.$4800

favourable.68MQV

=

SP(AQ

-

SQ)MQV

=

$8.00(6600

kg

-

6000

kg)MQV

=

$4800

unfavourableManagerial

Decision

MakingManagerial

Decision

MakingCost

accounting

information

is

often

used

bymanagement

for

short-term

decisions.Decision

making

involves

five

steps:Define

the

problem.Identify

alternatives.Collect

relevant

information

on

alternativeSelect

the

preferred

alternative.Analyzedecisions

made.69Managerial

Decision

Making70Accepting

additional

businessshould

be

based

on

incremental

costs

andincremental

revenuesIncremental

amounts

are

those

that

occur

if

thecompany

decides

to

accept

the

new

businessManagerial

Decision

Making71Make

or

Buy

DecisionsIncremental

costs

also

are

important

in

thedecision

to

make

a

product

or

purchase

it

from

asupplier

The

cost

to

produce

an

item

mustincludedirect

materialsdirect

labourincremental

overhead

We

should

not

use

the

predetermined

overhead

rate

todetermine

product

costManagerial

Decision

Making72Scrap

or

Rework

DefectsCosts

incurred

in

manufacturing

units

of

productthat

do

not

meet

quality

standards

are

sunk

costsand

cannot

be

recovered.As

long

as

rework

costs

are

recovered

throughsale

of

the

product

and

rework

does

not

interferewith

normal

production,

we

should

rework

ratherthan

scrap.Managerial

Decision

Making73Sell

or

Process

Furthersell

partially

completed

products

vs.

process

thto

completionAs

a

general

rule,

process

further

only

ifincremental

revenues

exceed

incremental

costsManagerial

Decision

Making74Selecting

Sales

MixWhen

a

company

sells

a

variety

of

products,some

are

likely

to

be

more

profitable

thanothers.

To

make

an

informed

decision

regardingsales

mix,

management

must

consider

.

.

.The

contribution

margin

of

each

product,Thefacilities

required

to

produce

eachproduct

and

any

constraints

on

the

facilities,

andThedemand

for

each

product.Managerial

Decision

Making75Eliminating

a

Segment