《Management Accounting 7th管理会计 Don R.Hansen》ch17.pptVIP

Chapter 1 - Relevant Costs Defined Activity Resource Usage Model and Assessing Relevancy Illustrative Examples of Relevant Cost Applications Make or Buy Keep or Drop Special Order Sell or Process Further Product Mix Two Approaches to Pricing 1. Cost-Based Pricing 2. Target Costing and Pricing Cost-Based Pricing Revenues $856,500 Cost of goods sold: Direct materials $489,750 Direct labor 140,000 Overhead 84,000 713,750 Gross profit $142,750 Selling and administrative expenses 25,000 Operating income $117,750 Determining Markup Percentages Target Costing and Pricing Target costing is a method of determining the cost of a product or service based on the price (target price) that customers are willing to pay. Markup on COGS = (S A expenses + Operating income) ÷ COGS = ($25,000 + $117,750) ÷ $713,750 = 0.20 Markup on direct materials = (DL + OH + S A expenses + Oper. income) ÷ Direct mater. = ($140,000 + $84,000 + $25,000 + $117,750) ÷$489,750 = 0.749 Determining Markup Percentages Direct materials (computer components, etc.) $100,000 Direct labor (100 x 6 hours x $15) 9,000 Overhead (60 percent of direct labor cost) 5,400 Estimated cost of goods sold $114,400 Plus 20 percent markup of COGS 22,880 Bid price $137,280 This is referred to as price-driven costing. 17 -* Tactical Decision Making CHAPTER 1. Describe the tactical decision-making model. 2. Explain how the activity resource usage model is used in assessing relevancy. 3. Apply tactical decision-making concepts in a variety of business situations. 4. Choose the optimal product mix when faced with one constrained resource. 5. Explain the impact of cost of pricing decisions. Objectives After studying this chapter, you should be able to: 6. Use linear programming to find the optimal solution to a problem of multiple constrained resources. (Appendix) Objectives Model for Making Tactical Decisions Step 1. Recognize and define the problem. Continued Increase c