Kế toán, kiểm toán - Chapter 17: Activity-Based costing and analysis

Financial and Managerial AccountingWild, Shaw, and Chiappetta Fourth Edition McGraw-Hill/Irwin Copyright © 2011 by The McGraw-Hill Companies, Inc. All rights reserved.Chapter 17Activity-Based Costing and AnalysisConceptual Learning ObjectivesC1: Distinguish between the plantwide overhead rate method, the departmental overhead rate method, and activity-based costing method.C2: Explain cost flows for activity-based costing.C3: Describe the four types of activities that cause overhead costs.17-*A1: Identify and assess advantages and disadvantages of the plantwide overhead rate and departmental overhead rate methods. A2: Identify and assess advantages and disadvantages of activity-based costing.Analytical Learning Objectives17-*P1: Allocate overhead costs to products using the plantwide overhead rate method. P2: Allocate overhead costs to products using departmental overhead rate method. P3: Allocate overhead costs to products using activity-based costing.Procedural Learning Objectives17-*Assigning Overhead CostsC1Overhead can be assigned to production in one of three ways:Single plant-wide rateDepartmental overhead ratesActivity-based costing17-*Plant Wide Overhead Rate MethodOverhead CostIndirect CostsCost AllocationBaseSingle Plant-Wide Overhead RateCost ObjectsProduct 1Product 2Product 3P117-*Plantwide Overhead Rate Method Advantages and DisadvantagesA1AdvantagesInformation is readily availableEasy to implementOften sufficient to meet external financial reporting needsDisadvantagesOverhead costs may not bear any relationship with direct labor hoursAll products may not use overhead costs in the same proportion17-*Departmental Overhead Rate MethodOverhead CostFirst StageSecondStageDepartment AIndirect CostsCost ObjectsAllocation BaseCost ObjectsDepartment A Overhead RateDepartment BDepartment BOverhead RateProduct 1Product 2Product 3C117-*Advantages and Disadvantages of Departmental Overhead Rate MethodA1AdvantagesMore accurate overhead allocationsMore refined than the plantwide overhead rate methodDisadvantagesCan distort product costsAssumes that products are similar in volume, complexity, batch sizeAssumes that departmental overhead costs are proportional to the allocation base17-*Cost Flows Under Activity-Based Costing MethodOverhead CostActivity CostPool XActivity CostPool YActivity CostPool ZFirst StageSecond StageActivity Overhead rateActivity Overhead rateActivity Overhead rateProduct 1Product 2Product 3C2Indirect CostsCost ObjectsCost ObjectsCost Allocation Base17-*Applying Activity-Based Costing4 steps:Identify activities and the costs they cause.Group similar activities into activity pools.Determine an activity rate for each activity cost pool.Allocate overhead costs to products using those activity rates. P317-*Four types of activities that cause overhead costsC3Unit levelBatch levelProduct levelFacility level17-*Advantages and Disadvantages of Activity-Based CostingA3Advantages:More accurate overhead cost allocationMore effective overhead cost controlFocus on relevant factorsBetter management of activitiesDisadvantages:Costs to implement and maintainUncertainty with decisions still remainsAdvantages (Continued)Can assist in distin-guishing value added activities17-*End of Chapter 1717-*