財(cái)務(wù)分析-costaccounting(文件)
【正文】 in costs had been allocated incorrectly among the three products. Middle America Manufacturing Cost Allocation bc BOS Copyright169。 Company, Inc. Cost Accounting 10 Cost Accounting Ri d in g mo w e r s B i cy cle s W a l kin g mo w e r s$ 1 8 .0M M( $ 3 . 0 M M )( $ 5 . 2 M M )($10)($5)$0$5$ 1 0$ 1 5$ 2 0Product Line Profitability (Millions of Dollars)Bain’s analysis indicated that both bicycles and walking mowers were unprofitable. Middle America then began to investigate whether to exit or fix these two businesses. Return on sales: % (%) (%) Sales: $250MM $100MM $75MM Middle America Manufacturing Actual Profitability bc BOS Copyright169。 Company, Inc. Cost Accounting 12 Cost Accounting Definitions: ?Costs that do not vary directly with changes in output ?Costs that vary directly with changes in output ?Costs incurred directly in the production or delivery of a firm’s product or service. These costs can easily be identified with, or assigned to, a particular product ?Costs generally incurred by the firm outside of the production process. These costs cannot easily be identified with, or assigned to, a particular product All costs can be broken down along two dimensions. Fixed Variable Direct Indirect vs. vs. Examples: ?Equipment depreciation ?Rent ?Advertising ?Raw materials ?Production labor ?Delivery costs ?Direct labor ?Dedicated equipment ?Raw materials ?SGamp。 1998 Bain amp。 1998 Bain amp。 1998 Bain amp。 1998 Bain amp。s salaries ?Sales travel and expenses ?Electricity to run machines bc BOS Copyright169。 Company, Inc. Cost Accounting 23 Cost Accounting Cost Components Fixed vs. Variable Direct vs. Indirect Office supplies Fixed, because it is unlikely that additional office supplies will be needed to handle 10% increase in volume Indirect, because the office supplies are used to support all three products Goodwill amortization Fixed, because goodwill is not directly related to volume Indirect, assuming the goodwill is incurred to support the whole pany Salespeople39。 1998 Bain amp。 1998 Bain amp。 1998 Bain amp。 1998 Bain amp。A ? Office supplies ? Plant manager Rule of thumb: Types of Costs Cost (Dollars) Volume (Units) Variable costs Semivariable costs Fixed costs Fixed vs. SemiVariable vs. Variable Costs Volume Contribution margin (., revenue less variable costs) Fixed costs Breakeven volume $ Operating profit Breakeven volume = Fixed costs Fixed costs Unit contribution Price per unit Variable cost per unit Breakeven Volume Fixed Variable Direct Indirect Cost Categorization Matrix Operating loss = If a particular cost changes when production increases or decreases, the cost is variable. If a particular cost “goes away” when a product is dropped from the product line, the cost is direct. Takeaway Slides 。 1998 Bain amp。 1998 Bain amp。 1998 Bain amp。 1998 Bain amp。 1998 Bain amp。 Company, Inc. Cost Accounting 22 Cost Accounting Cost Components Fixed vs. Variable Direct vs. Indirect Advertising Fixed, because advertising is usually not tied directly to volume Direct, because, in this case, most of it is product specific Equipment depreciation Fixed, because excess capacity exists for a 10% increase in volume Indirect, because all products are made on the same machines CEO’s salary Fixed, assuming his/her salary does not change with 10% sales increase Indirect, because CEO oversees the whole pany Supervisory labor Fixed, because it is unlikely that additional supervisors will be needed to handle a 10% increase in volume Indirect, because supervisors oversee production of all three products Indirect, because all three products are produced at the same site Rent Fixed, assuming current facility has excess capacity Cost Allocation Exercise Detailed Answer (1 of 3) bc BOS Copyright169。 1998 Bain amp。 1998 Bain amp。 1998 Bain amp。 1998 Bain amp。 1998 Bain amp。 Company, Inc. Cost Accounting 11 Cost Accounting ?Importance of cost allocation ?Client example ?Def
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