【正文】 on Plantwide Overhead Rate Departmental Overhead Rates Activity Based Costing 18 Activitybased costing ?is a way of measuring both the cost of cost objects and the performance of activities ?can help solve problems such as ?distorted product costs ?poor cost control ?the form of ABC adopted depends on the problems that need to be addressed 19 Designing an ABC System Cost Objects (., products and customers) Activities Consumption of Resources Cost 20 21 Identifying and Defining Activities An ACTIVITY is a part of the production process for which management wants a separate reporting of costs. UnitLevel Activities BatchLevel Activities Productsustaining Activities Facilitysustaining Activities 22 Output UnitLevel Costs... – are resources sacrificed on activities performed on each individual unit of product or service . ?Energy used by machines ?Machine depreciation or repairs The Key Question: Does the amount of the activity cost pool increase with the number of units produced? 23 BatchLevel Costs... – are resources sacrificed on activities that are related to a batch of units rather than to each individual unit of product or service. ?Setup activity costs may be driven by setup hours. This will depend on the number setups carried out . on the number of batches produced and the time each setup takes. 24 ProductSustaining... – (or servicesustaining) 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. 25 FacilitySustaining Costs... – are resources sacrificed on activities that cannot be traced to individual products or services but which support the anization as a whole. ?General administration ?rent ?building security ?CEO?s salary 26 Different forms of ABC ?Simple approach includes manufacturing overhead only ?ABC system for all indirect costs includes manufacturing and nonmanufacturing costs ?Comprehensive system includes all productrelated costs, except direct material 27 The Mechanics of ABC Classic Brass Ltd makes finely machined brass fittings for a variety of applications. For this pany, the ultimate cost objects are: ?Products, ?Customer orders, and ?Customers. One overhead cost shipping can be traced directly to customer orders. The pany’s activity cost pools are shown on the next slide. 28 Step 1: Identify and Define Activities and Activity Cost Pools At Classic Brass, the ABC team, selected the following activity cost pools and activity measures: A c t i v i t y C os t P oo l A c t i v i t y M e a s ur eC us t om e r or de r s N um be r of c us t om e r or de r sP r od uc t de s i gn N o. of pr od uc t s de s i gn e dO r de r s i z e M a c hi ne ho ur sC us t om e r r e l a t i on s N um be r of a c t i v e c us t om e r sO t he r ( no t a s s i gn e d t o pr od uc t s )A c t i v i t y C o s t P o o l s a t C l a s s i c B r a s s29 Step 1: Identify and Define Activities and Activity Cost Pools ? Customer Orders assigned all costs of resources that are consumed by taking and processing customer orders. ? Product Designs assigned all costs of resources consumed by designing products. ? Order Size assigned all costs of resources consumed as a consequence of the number of units produced. ? Customer Relations – assigned all costs associated with maintaining relations with customers. ? Other – assigned all overhead costs that are not associated with the other cost pools. 30 P r o d u c t i o n D e p a r t m e n tI n d i r e c t f a c t o r y w a g e s 5 0 0 , 0 0 0$ F a c t o r y e q u i p m e n t d e p r e c i a t i o n 3 0 0 , 0 0 0 F a c t o r y u t i l i t i e s 1 2 0 , 0 0 0 F a c t o r y b u i l d i n g l e a s e 8 0 , 0 0 0 1 , 0 0 0 , 0 0 0$ S h i p p i n g c o s t s t r a c e d t o c u s t o m e r o r d e r s 4 0 , 0 0 0 G e n e r a l A d m i n i s t r a t i v e D e p a r t m e n tA d m i n i s t r a t i v e w a g e s a n d s a l a r i e s 4 0 0 , 0 0 0 O f f i c e e q u i p m e n t d e p r e c i a t i o n 5 0 , 0 0 0 A d m i n i s t r a t i v e b u i l d i n g l e a s e 6 0 , 0 0 0 5 1 0 , 0 0 0 M a r k e t i n g D e p a r t m e n tM a r k e t i n g w a g e s a n d s a l a r i e s 2 5 0 , 0 0 0 S e l l i n g e x p e n s e s 5 0 , 0 0 0 3 0 0 , 0 0 0 T o t a l o v e r h e a d c o s t s 1 , 8 5 0 , 0 0 0$ O v e r h e a d C o s t s a t C l a s s i c B r a s s( M a n u f a c t u r i n g a n d N o n M a n u f a c t u r i n g )Step 2: Whenever Possible, Directly Trace Overhead Costs to Activities and Cost Objects 31 Step 3: Assign Costs to Activity Cost Pools C us t om e r O r de r s P r od uc t D e s i gn O r de r S i z e C us t om e r R e l a t i on s O t he r To t a lP r od uc t i on D e pa r t m e ntI nd i r e c t f a c t ory w a ge s 25% 40% 20% 10% 5% 100%Fa c t ory e qu i pm e nt de pre c i a t i on 20% 0% 60% 0% 20% 100%Fa c t ory ut i l i t i e s 0% 10% 50% 0% 40% 100%Fa c t ory bu i l di ng l e a s e 0% 0% 0% 0% 100% 100%S hi pp i ng c os t s * *G e ne r a l A dm i ni s t r a t i v e D e pa r t m e ntA dm i ni s t r a t i v e w a ge s a nd s a l a r i e s 15% 5% 10% 30% 40% 100%O f f i c e e qu i pm e nt de pre c i a t i on 30% 0% 0% 25% 45% 100%A dm i ni s t r a t i v e bu i l di ng l e a s e 0% 0% 0% 0% 100% 100%M a r k e t i ng D e pa r t m e ntM a r k e t i ng w a ge s a nd s a l a r i e s 20% 10% 0% 60% 10% 100%S e l l i ng e x