中国石油大学（北京）工商管理学院管理会计双语课件Chapter4 Activity-Based Cost Systems.pptVIP

TraditionalCost ManagementSystems Chapter 3 Cost Management Systems Cost management systems have a wide variety of uses Two cost management systems have been used traditionally to cost products and services Job order costing Process costing Many companies continue to use these two systems Cost Management Systems All cost systems work in essentially the same way: Expense categories are developed and then expenses are mapped to service departments, production centers, or activities Expenses are then attached to cost objects The way these links are made and the activities defined is what differentiates systems Manufacturing costs The costs of producing a product can be broken down into two broad categories: Direct cost – cost of a resource or activity that is acquired or used by a single cost object Indirect cost – cost of a resource that was acquired to be used by more than one cost object Direct and Indirect Costs Direct costs can be easily traced to a cost object Indirect costs cannot easily be traced to a cost object so they must be allocated or assigned to the cost object Job Order v. Process Costing Systems A job order costing system estimates the costs of manufacturing products for different jobs required for specific customer orders A process costing system is applicable when all units produced during a specified time frame are treated as one unit of output Need for Job Order Costing Products may differ Materials content Hours of labor required Machine time required Demand placed on support activity resources (i.e., manufacturing overhead) Special customer needs that require customized production With such variety, managers need to understand the costs of individual products so that they can assess product and customer profitability The Cost Flow Model The cost flow model essentially uses an inventory concept to track costs Raw materials inventory Work-in-process (WIP) inventory Raw materials are transformed by labor and support resources Costs of the res