財(cái)務(wù)分析-costaccounting-預(yù)覽頁(yè)
【正文】 ch the pany plans to increase sales volume by 10%? Fixed Variable Direct Indirect ?CEO’s salary ?Raw materials ?Supervisory labor ?Production floor labor ?Rent ?Equipment depreciation ?Office supplies ?Freight to customer ?Electricity to run machines ?Interest expense to finance inventory ?Advertising ?Goodwill amortization ?Sales missions ?Sales peoples’ salaries ?Sales travel and expenses Costs: Cost Allocation Exercise Question bc BOS Copyright169。 1998 Bain amp。s salaries Fixed, assuming that current sales force can handle 10% additional volume Indirect, because each salesman sells all three products Sales travel and expenses Fixed, assuming that 10% volume increase will not require significant increase in sales activities Indirect, because salesforce handles all three products Raw material Variable, because a 10% increase in volume would require 10% more raw materials Direct, because raw materials are directly traceable to individual products Cost Allocation Exercise Detailed Answer (2 of 3) bc BOS Copyright169。 Company, Inc. Cost Accounting 25 Cost Accounting ?Labor –In many client situations, restraints placed by unions and difficulty in hiring and firing people in response to short term volume fluctuations make a portion of labor costs behave as fixed costs ?Electricity to run machines –In theory this is direct, but in practice it is considered indirect because it is difficult to trace electricity cost to products –Also, the 80/20 rule applies here. Electricity is usually a small cost item, and, for simplicity, could be allocated using machine hours spent on production ?Advertising –Usually, advertising is not tied to volume. For example, advertising to support a corporate brand is not tied to the volume of the products under that brand. If advertising is not tied to volume, it is fixed and indirect. There are few caveats: Cost Allocation Exercise Caveats bc BOS Copyright169。 Company, Inc. Cost Accounting 27 Cost Accounting Step 1: Categorize costs Advertising Classroom rental Program administration Program director’s salary Faculty salaries Guest lectures Room and board per student Text and supplies per student Fixed Variable Step 2: Calculate fixed costs Fixed costs: $3,000 Advertising $15,000 Program administration $20,000 Program director’s salary $12,000 Guest lectures $50,000 SemiVariable First, you must categorize costs and calculate fixed costs. Breakeven Exercise Answer (1 of 3) bc BOS Copyright169。 Company, Inc. Cost Accounting 29 Cost Accounting *The most effective way to calculate the breakeven volume is to write a simple formula in Excel Step 5: Calculate breakeven volume Breakeven volume = For 10 students: = students with 10 students the program does not If you keep increasing the number of students by one and redoing the calculation*, you will find that the business school needs to have 15 students to break even on the executive program Fixed costs Unit contribution $140,000 $9,800 Now you are ready calculate the breakeven volume. For 15 students: $120,000 $9,800 = students break even Breakeven Exercise Answer (3 of 3) bc BOS Copyright169。 Company, Inc. Cost Accounting 31 Cost Accounting ?A pany must know the total cost associated with the production and delivery of its good and services in order to make the right strategic and tactical decisions ?Most panies lack accurate cost data by product ?All costs can be broken down along two dimensions: fixed versus variable and direct versus indirect ?Defining the appropriate time horizon for costs is important because fixed costs are “fixed” only for a certain time frame ?Breakeven volume is the minimum amount of product that a pany must sell in order to cover its fixed costs. At breakeven volume, the pany’s operating profit is zero Breakeven volume = Fixed costs Unit contribution = Fixed costs Price per unit Variable cost per unit Breakeven Volume Cost Allocation Overview Types of Costs Key Takeaways bc BOS Copyright16
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