第四章 作业成本法重点介绍.ppt

* The first step is to gather each product’s sales and direct cost data as shown. * The second step is to compute the plantwide overhead rate. Notice: The numerator is the $1,000,000 of manufacturing overhead shown earlier. The denominator is the 20,000 machine hours used for the order size activity from the ABC system. The plantwide overhead rate is $50 per machine-hour. * The third step is to allocate manufacturing overhead to each product. Notice: 17,500 machine-hours were worked on standard stanchions, so $875,000 (17,500 hours × $50) of manufacturing overhead is assigned to this product. Custom compass housings are assigning the remaining $125,000 (2,500 × $50) of manufacturing overhead. * The fourth step is to compute the product margins—$615,750 for standard stanchions and $258,000 for custom compass housings. Notice selling and administrative expenses are not allocated to products because they are assumed to be period expenses. The overall net loss of $1,250 reconciles with the income statement shown earlier. * The changes in product margins caused by switching from the traditional cost system to the activity-based costing system are as shown. Notice: The traditional cost system overcosts the standard stanchions, and consequently, reports an artificially low product margin for this product. Conversely, the traditional cost system undercosts the custom compass housings, and consequently, reports an artificially high product margin for this product. * There are three reasons why the reported product margins for the two costing systems differ from one another. ? The traditional cost system allocates all manufacturing overhead to products. The ABC system only assigns manufacturing overhead costs consumed by products to those products. More specifically, the ABC system does not assign the manufacturing overhead costs consumed by the customer relations activity to products because these costs are caus