ppt课件-atraditionaloverheadcalculation.pptVIP

Chapter 6Cost Allocation and Activity-Based Costing Presentation Outline Purposes of Cost Allocation The Process of Cost Allocation Activity Based Costing I. Purposes of Cost Allocation To Provide Information for Decision Making To Reduce Frivolous Use of Common Resources To Encourage Evaluation of Services To Provide “Full” Cost Information A. To Provide Information for Decision Making From a decision making standpoint, the allocated cost should measure the opportunity cost of using a company resource. B. To Reduce Frivolous Use of Common Costs By not allocating costs, resources may appear “free” to users. However, resources never come with zero costs. C. To Encourage Evaluation of Services Users of services should consider the possibility of lower cost alternative. This is unlikely to be considered if costs are not allocated to the user. D. To Provide “Full” Cost Information GAAP requires full-costing for external reporting purposes. In the long run, all costs must be covered. II. The Process of Cost Allocation The Steps of Cost Allocation Arbitrary Approaches to Cost Allocation Allocating Service Department Costs Problems with Cost Allocation A. The Steps of Cost Allocation Determine the Cost Objective (Cost Object). Form Cost Pools Select an Allocation Base to Relate the Cost Pools to Cost Objects 1. Identifying the Cost Objective (Cost Object) Determine the product, service, department, etc., that is to receive the allocation. 2. Form Cost Pools A cost pool is a grouping of individual costs, the sum of which is allocated using a single allocation base. Cost pools include: Departments (i.e., maintenance or personnel departments) Major Activities (i.e., equipment setups) 3. Select an Allocation Base to Relate the Cost Pools to Cost Objects It is very important that the allocation base relates the cost pool to the cost object. Allocation should be based on a cause and effect relationship between costs and cost objects. If cause and effect cannot be establ