ABC成本财务分析法.pptxVIP

MAA 703Management AccountingTopic 6 Activity-Based CostingEvolution of ABCConventional costing systems use a two-stage allocation process: 1. service department costs are allocated to production departments. 2. production department overhead costs are allocated to products using a volume-based predetermined overhead rate.Product costs don’t make senseProblem: There may be no relationship between the overhead application base and the way that different products cause overhead costsThe result:High-volume simple products are over- costed and over-pricedLow-volume complex products are under-costed and under-pricedPlantwide Overhead RatesCompanies have tended to use direct labour as the overhead application base.However direct labour is now a relatively minor part of total manufacturing cost. Many tasks that used to be done by hand are now done by automated equipment.Finishing DepartmentPainting DepartmentShipping DepartmentDepartmental Overhead RatesA two stage process isnecessary because costsare allocated to departmentsand then to products.Departmental Overhead RatesIndirectLaborIndirectMaterialsOtherOverheadStage One:Costs assignedto poolsDepartment1Department2Department3Cost poolsDepartmental Overhead RatesIndirectLaborOtherOverheadIndirectMaterialsStage One:Costs assignedto poolsDepartment1Department2Department3Cost poolsStage Two:Costs appliedto products ProductsDepartmental Overhead RatesIndirectLaborIndirectMaterialsOtherOverheadStage One:Costs assignedto poolsDepartment1Department2Department3Cost poolsDirect Labour HoursMachineHoursRawMaterialsCostStage Two:Costs appliedto products ProductsDepartmental Allocation BasesCost Distortions caused by 2-stage allocationsThere is a no link between the cause of support activity costs and the basis for assigning these costs to productsWhy? 1. Allocations are based on unit or volume related measures. 2. Different products consume different amounts of support activities. Questionable profit marginsTo compete in