Professional Documents
Culture Documents
MANAGERIAL ACCOUNTING
VARIABLE COSTING AND SEGMENT REPORTING: TOOLS FOR
MANAGEMENT
DISCLAIMER
Managerial Accounting
Seventeenth edition
5-4
Learning Objective 1
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Variable Absorption
Costing Costing
Direct Materials
Product
Direct Labor Product
Costs
Variable Manufacturing Overhead Costs
Fixed Manufacturing Overhead
Period
Variable Selling and Administrative Expenses Period
Costs
Fixed Selling and Administrative Expenses Costs
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Quick Check 1
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Quick Check 1a
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Learning Objective 2
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Variable Costing
Sales (20,000 × $30) $ 600,000
Less variable expenses:
Variable cost of goods sold (20,000 × $10) $ 200,000
Variable selling & administrative
expenses (20,000 × $3) 60,000
Total variable expenses 260,000
Contribution margin 340,000
Less fixed expenses:
Fixed manufacturing overhead $ 150,000
Fixed selling & administrative expenses 100,000 250,000
Net operating income $ 90,000
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5-14
Unit product
cost.
Learning Objective 3
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5-16
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5-19
Absorption Variable
Costing Costing
Direct materials, direct labor,
and variable mfg. overhead $ 10 $ 10
Fixed mfg. overhead
($150,000 ÷ 25,000 units) 6 -
Unit product cost $ 16 $ 10
Since the variable costs per unit, total fixed costs, and
the number of units produced remained unchanged,
the unit cost computations also remain unchanged.
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Variable Costing
All fixed
manufacturing
Variable
overhead is
manufacturing
expensed.
costs only.
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further distribution permitted without the prior written consent of McGraw-Hill Education.
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Absorption Costing
Unit product
cost.
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further distribution permitted without the prior written consent of McGraw-Hill Education.
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5-25
Learning Objective 4
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5-29
A Sales Territory
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5-30
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5-32
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Segment Margin
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Fixed
Costs
Don’t allocate
common costs to
segments.
Traceable Common
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1.Computer Division
2.Television Division
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Fixed and
variable costs
are listed in
separate
sections.
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further distribution permitted without the prior written consent of McGraw-Hill Education.
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Segment margin
is Television’s
contribution
to profits.
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further distribution permitted without the prior written consent of McGraw-Hill Education.
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©McGraw-Hill Education. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or
further distribution permitted without the prior written consent of McGraw-Hill Education.
5-40
©McGraw-Hill Education. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or
further distribution permitted without the prior written consent of McGraw-Hill Education.
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©McGraw-Hill Education. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or
further distribution permitted without the prior written consent of McGraw-Hill Education.
5-42
©McGraw-Hill Education. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or
further distribution permitted without the prior written consent of McGraw-Hill Education.
5-43
©McGraw-Hill Education. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or
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5% increase in sales
Learning Objective 5
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©McGraw-Hill Education. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or
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Omission of Costs
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5-56
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5-57
Quick Check 2
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5-58
Quick Check 2a
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5-59
Quick Check 2b
Quick Check 2c
Quick Check 2d
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Quick Check 2e
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Quick Check 2f
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Quick Check 2g
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Quick Check 2h
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Quick Check 2i
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Company-wide Income
Statements
• Absorption Costing
• Fixed manufacturing costs must be assigned to
products to properly match revenues and costs.
• Variable Costing
• Fixed manufacturing costs are capacity costs and
will be incurred even if nothing is produced.
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Segmented Financial
Information
Both U.S. GAAP and IFRS require publically
traded companies to include segmented
financial data in their annual reports.
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THANK YOU
VARIABLE COSTING AND SEGMENT REPORTING: TOOLS FOR MANAGEMENT
UNIVERSITAS BINA NUSANTARA
July, 2023