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CH2.

Product Costing Systems:Concepts and Design Issues Cost Objects: Anything whose cost we want to determine (Product, process, location, person, region, etc) Whether a cost is direct or indirect depends on the cost object Direct cost: Easily and conveniently traceable to the cost object. Indirect: Not easily or conveniently traceable (Cost is shared among cost objects, No apparent link between the cost and the object, Not cost effective to trace) Product costs: Reasonable and necessary costs to prepare the product for sale to the customer (Direct materials, Direct labor, Overhead), Part of inventory until product is sold Period costs,Non-manufacturing costs, Expensed when incurred Prime Cost: DL, DM; Conversion Cost: DL, OH.
Example Company Statement of Cost of Goods Manufactured and Sold Beginning raw materials inventory Add: Purchases of raw materials Raw materials available Less: Ending raw materials inventory Raw materials used in production Direct labor Overhead Total manufacturing cost Add: Beginning work in process inventory $ Less: Ending work in process inventory Cost of goods manufactured Add: Beginning finished goods inventory Goods available for sale Less: Ending finished goods inventory Cost of goods sold $ $ $ $ $ $ 5,000 187,000 192,000 (7,000) 185,000 (1) 71,000 134,000 390,000 Input 6,000 396,000 (8,000) 388,000 Output (2) 3,000 391,000 (2,000) 389,000 Expense (3)

CH3 Cost Accumulation for Job-Shop & Batch Production Job Costing: Units of output are distinctive (individual jobs, special orders), Each unit has a relatively high value, Costs can be traced feasibly to the units. Costs are traced or assigned to individual jobs. Process Costing: Units of output are homogeneous (mass production). Each unit has a very low value. Not feasible to trace costs to units. Costs are traced to the process. Then an average cost per unit is calculated for the process. Operation Costing is a hybrid often used for batches of similar products with different types of materials
Job Cost Beginning Balance (BB) Resource Transfers In (TI) Resource Transfers Out (TO) Job Cost Ending Balance (EB)

The model can be used to control use of resources, helping to ensure that goals and objectives are met. Managing and Using Cost Flow Information Example Boss, Co. began May with $1,000 of costs in (WIP) Inventory and $2,000 of completed units in Finished Goods Inventory. During May, Boss incurred $68,000 of production costs. Goods costing $62,000 were sent to Finished Goods during the month. Also, during May, goods costing $60,000 were sold.Using the Cost Flow Model, compute the ending inventory amounts for WIP Inventory and Finished Goods Inventory.
Work-inProcess $ 1.000 68.000 (62.000) $ 7.000 Finished Goods 2.000 62.000 (60.000) $ 4.000 $

CH4 ABC Traditional Costing System Sistem Cost tradisional tidak membiayakan indirect cost secara langsung ke produk. Tiga poin penting harus yang harus dibuat sehubungan dengan memperbaiki biaya tradisional 1. Melacak berbagai macam costs secara langsung ke produk selama biaya nya tidak melebihi manfaatnua. 2. Menkategorikan indirect cost, dalam suatu "cost pool". 3. Menggunakan alokasi biaya untuk menetapkan indirect cost ke produk. Activity Based Costing Sistem Is it important to know how the work of the organization is done? Do we need costs to provide incentives for Improvements? Jika YA, pake ABC Activity based costing allocates costs based on the discreet tasks (activities) that drive those costs. 4 langkah Identify and classify the activities related to the companys products or services. Seluruh Aktifitas dalam siklus harus disertakan dalam pengidentifikasiaannya.. kemudian diklasifikasikan sebagai: a. Unit Level resources and activities . The work efforts that transform resources into individual products and resources . b. Batch Level resources and activities Manufacturing or service technology that affect multiple units of activity equally and simultaneously c. Product Level resources and activities. Support specific products or service lines d.Customer Level resources and activities Dilakukan untuk memenuhi kebutuhan pelanggan yang spesifik. e. Facility Level resources and activities Support all of the organizations processes.Aktivitas tingkat fasilitas adalah kelompok aktivitas yang hanya akan berubah jika terdapat perubahan fasilitas / kapasitas produksi. Tujuan dari pengklasifikasian klasifikasi sumber daya dan kegiatan ke dalam lima kategori adalah untuk membuat: 1.Akurasi tentang bagaimana organisasi melakukan pekerjaan dan 2. Kemampuan untuk melacak cost n resources ke product . Perusahaan membuat daftar aktivitas mereka dalam berbagai cara, termasuk: Top Down Approach Tim ABC dari manajemen menengah atau di atas mengembangkan list aktivitas. Recycling Approach Menggunakan dokumentasi proses yang digunakan untuk keperluan lain. Interview or Participative Approach Tim ABC termasuk karyawan atau wawancara operasi. Estimate the costs associated with each activity. .Ketika memperkirakan biaya kegiatan, hanya biaya yang berkaitan dengan produk harus digunakan Biaya "kapasitas yang tidak terpakai" tidak harus diterapkan pada produk. Calculate a cost-driver rate for each activity. Cost driver adalah perkiraan cost per unit cost driver untuk setiap kegiatan. Sebuah cost driver merupakan karakteristik dari suatu kegiatan atau peristiwa yang menyebabkan suatu aktivitas atau kegiatan ke pembentukan biaya. Dua informasi menghitung tingkat cost driver adalah: Biaya KegiatanActivity Cost Volume Kegiatan
Activity Cost Activity Volume = Cost-Driver Rate

Beginning Balance + Transfers In Transfers Out = Ending Balance

CH2. Product Costing Systems:Concepts and Design Issues Cost Drivers : The cause of a particular cost. a. Capacity driver (Decision to acquire capacity), b. Transaction driver ( Each occurrence causes the cost), c. Duration driver (Amount of cost depends on the duration of the event) Absorption vs. Variable Costing. Absorption costing : Product costs include material, labor, variable and fixed overhead. All $ of the and necessary Selling price 100 reasonable per unit costs to produce the product Material $ 30 per unit Income statement arranged by type of cost. Product Labor $ 15 per unit or period, Revenue Variable overhead $ cost 5 per of unit goods sold = gross profit, Gross profit S&A expenses = net income Fixed overhead $ 50,000 Variable costing selling Product costs only include labor and Variable expenses $ 10 material, per unit variable overhead. Fixed overhead is treated as a Fixed selling expenses $ 10,000 period cost Income statement by cost behavior. Year 1 arranged Year 2 Year 3 Units produced 2,000 Revenue 4,000 2,000 Variable then fixed. variable costs = Units sold 2,000 2,000 4,000 contribution margin. Contribution margin fixed costs = net income
Absorption costing income statements Year 1 Year 2 Year 3 Sales $ 200,000 $ 200,000 $ 400,000 Cost of goods sold 150,000 125,000 275,000 Gross profit $ 50,000 $ 75,000 $ 125,000 Selling expenses 30,000 30,000 50,000 Net income $ 20,000 $ 45,000 $ 75,000

We can determine Direct Materials Cost and Direct Labor Cost for a Job as we do the work. But we wont know actual Overhead Cost until the end of the accounting period, so we apply overhead to the job using a Predetermined Overhead Rate Predetermined Overhead rate atau anggaran biaya overhead pabrik yang di tentukan oleh anggaran dari setiap level cost driver. 5 langkah pendekatan dalam menentukan Predetermined OH rate: 1. Mengidentifikasi biaya-biaya yang termasuk biaya tidak langsung, 2. Menentukan biaya-biaya untuk masing-masing item biaya yang telah di identifikasi pada langkah pertama, 3 Menentukan pemicu-pemicu biaya, 4. Memperkirakan jumlah dari pemicu biaya, 5. Menghitung Predetermined Overhead rate.

Selisih antara aktual dengan anggaran biasa disebut overhead variance, Jika OH aktual > anggaran Under Applied sedangkan apabila OH aktual < anggaran maka Over Applied. Costs Actual Cost Normal Cost Standard Cost Actual rate Actual rate x Predetermined Direct x Actual Actual Input rate x Standard Cost Input allowed inputs Actual rate Predetermined Predetermined Indirect x Actual rate x Actual rate x Standard Cost Input Input allowed inputs

1.

Assign activity costs to products using the cost-driver rate. Mengidentifikasi semua kegiatan yang berkaitan dengan suatu produk atau jasa., 2. Tentukan berapa banyak unit setiap kegiatan yang digunakan per unit produk., 3. Menentukan biaya produk menggunakan biaya-driver tarif untuk setiap kegiatan

Variable costing income statements Sales $ 200,000 $ 200,000 $ Var. cost of goods sold 100,000 100,000 Var. selling expenses 20,000 20,000 Contribution margin $ 80,000 $ 80,000 $ Fixed overhead 50,000 50,000 Fixed selling expenses 10,000 10,000 Net income $ 20,000 $ 20,000 $ Difference $ $ 25,000 $

400,000 200,000 40,000 160,000 50,000 10,000 100,000 (25,000)

Activity Factory Floor Space Electricity Water Quality Control Packaging - Inner Packaging - Outer

Cost-Driver Base Square Footage Kilowatts Gallons Units Inspected Ounces of popcorn Boxes

$ $ $ $ $ $

Cost-Driver Rate 50,000 0,050 0,160 0,850 0,025 1,250

Resources Used by Product A 20.000 Sq. Ft. 15.000 KW 80.000 Gal. 135.000 Units 270.000 Oz. 135.000 Boxes

Fixed overhead : Is it necessary to produce the product? Is it related to production volume? Is it a product or period cost? Which is more useful? Financial reporting Absorption required. Decision making Variable does not distort cost as volume changes. Miscelious Cost Committed cost: Decision has been made to incur the cost in the future. Discretionary cost: Cost which can be increased or decreased at will Sunk cost: Cost incurred previously. Opportunity cost : Benefit given up when one alternative is chosen over another Resources Supplied vs. Resources Used Cost of resource supplied : Capacity (hours, etc.) available * cost per unit of capacity. Cost of resource used .Capacity used : cost per unit of capacity. Cost of unused capacity: Cost of resource supplied cost of resource used
A worker is paid for an 8-hour day. The worker can produce 10 units per hour and is paid $10 per hour ($1 per unit). The worker only produced 50 units on Monday. Cost of capacity available: $80 Cost of capacity used: 50 units * $1 per unit = $50 Cost of unused capacity: $80 - $50 = $30

Cost-Driver Base Square Footage Kilowatts Gallons Units Inspected Packaging - Inner Ounces of popcorn Packaging - Outer Boxes Activity Factory Floor Space Electricity Water Quality Control

Cost-Driver Resources Used Rate Cost Assigned by Product A $ 50,000 20.000 Sq. Ft. $ 1.000.000,00 $ $ $ $ $ 0,050 0,160 0,850 0,025 1,250 15.000 80.000 135.000 270.000 135.000 KW Gal. Units Oz. $ 750,00 $ 12.800,00 $ 114.750,00 $ 6.750,00

Boxes $ 168.750,00

Total Cost Assigned to Product A $ 1.303.800,00

$20,000 may be allocated to these accounts. (FG, WIP, COGS) or may be closed directly to COGS (Glass Creation method)
If Manufacturing Overhead is . . . UNDERAPPLIED (Applied OH is less than actual OH) OVERAPPLIED (Applied OH is greater than actual OH) DECREASE Cost of Goods Sold Alternative 1 Close to Cost of Goods Sold INCREASE Cost of Goods Sold Alternative 2 Allocation INCREASE Work in Process Finished Goods Cost of Goods Sold DECREASE Work in Process Finished Goods Cost of Goods Sold

Product and Customer Profitability Companies will often look at the profitability for individual products or customers. Information required for each product or customer includes: Revenue, costs that can be traced, costs that can not be traced.
Revenues Costs Traced to Products Unit Level Batch Level Product Level Customer Level Facility Level Total Costs Traced to Products Product Profitability Costs Not Traced to Products Operating Income Containers Baby Care $ 120.000 $ 154.000 (48.000) (3.600) (16.000) (1.800) (15.800) (85.200) $ 34.800 $ Total $ 274.000 (118.000) (13.200) (60.000) (6.200) (38.800) (236.200) 37.800 (32.400) $ 5.400

Metode prorate (contoh lain klo variance nya 875)


Work in process Finished goods Cost of goods sold Total Ending balance 4,350 4,300 7,675 $ 16,325 $ Percent of total Variance Adjustment 27% $ 875 $ 236 26% 875 228 47% 875 411 100% $ 875

(70.000) (9.600) (44.000) (4.400) (23.000) (151.000) 3.000 $

CH. 5 ABM Mengevaluasi biaya dan nilai-nilai dari kegiatan dalam proses. Untuk mengidentifikasi peluang dalam meningkatkan efisiensi. .. ABM menambhakan ABC dengan: a. Identifikasi aktivitas added and non add, , b.Mengidentifikasi nilai yang dirasakan pelanggan dari masing-masing aktivitas , c Mengidentifikasi peluang untuk meningkatkan aktivitas add dan mengurangi atau menghilangkan aktivitas non add Aktivitas AKTIVITAS Add value meningkatkan nilai produk dan jasa di mata pelanggan. Non add- tidak memberikan kontribusi yang dirasakan oleh pelanggan Combination of ABC And Target Costing

Work in process inventory 236 Finished goods inventory 228 Contoh: Cost of goods sold 411 bulk chocolate which Himshey Chocolate Company produces Overhead 875 can be sold as is, or processed into bars and smooches If closed to cost of goods sold a. Joint costs, including cocoa beans, milk, sugar, etc. are Cost of goods sold $1,200,000 to produce 875 1,000,000 pounds of chocolate Overhead b. Output: 100,000 pounds of 875 bulk chocolate, 600,000 pounds of bars, 300,000 pounds of smooches, 10,000 pounds of cocoa bean shells. .Further processing costs and selling prices :Bulk chocolate: $5,000; $150,000 , Bars: $60,000; $800,000, Smooches: $45,000; $900,000, Shells: $500; $1,000 a.
Sales revenue Further processing costs

ABC is often considered as an option when one or more of the following conditions exist: Indirect costs are significant in proportion to direct costs and use only one or two cost-drivers. Goods are complex, requiring many inputs and processes. Simple, high-volume products perform poorly than complex, SurgerymoreEmergency Radiology low-volume products. Different believe costs48,000 are Human resources $ 240,000 $ departments 120,000 $ 72,000 $ assigned inaccurately. The company loses bids it thought were (50/100) (30/100) (20/100) low, and wins bids it thought were high. Operations have changed significantly ,142,000 but the costing system not changed. Purchasing $ $ 42,600 $ has56,800 $ 42,600
(90/300) Maintenance $ 620,000 (120/300) (90/300)

$ 186,000 $ 341,000 $ 93,000 (3,600/12,000) (6,600/12,000) (1,800/12,000) $ $ $ 348,600 3,285,000 3,633,600 $ $ $ 469,800 2,756,000 3,225,800 $ $ $ 183,600 930,000 1,113,600

Service cost Department cost Total cost

$ $ $

1,002,000 6,971,000 7,973,000

NRV
Bulk chocolate $ 150,000 $ 5,000 Bars 800,000 60,000 Smooches $ 900,000 45,000 $ Total 1,850,000 110,000

Step Methode