Quản trị Kinh doanh - Chapter 18: Managerial accounting concepts and principles

Managerial Accounting Concepts and PrinciplesChapter 18PowerPoint Editor: Beth Kane, MBA, CPACopyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. 18-C1: Purpose of Managerial Accounting 2Managerial accountingprovides financial and nonfinancial informationfor managers of anorganization and otherdecision makers.Managerial Accounting BasicsC 13Purpose of Managerial AccountingC 14Nature of Managerial AccountingC 15Fraud and Ethics inManagerial AccountingFraud affects all business and it is costly: A 2014 Report to the Nation from the Association of Certified Fraud Examiners (ACFE) estimates the average U.S. business loses 5% of its annual revenues to fraud.The Institute of Management Accountants has issued a code of ethics to help accountants involved in solving ethical dilemmas. C 16 18-C2: Cost Classifications 7ActivityCostActivityCostTypes of Cost ClassificationsClassification by Behavior Cost behavior refers to how a cost will react to changes in the level of business activity.Total fixed costs donot change when activity changes.Total variable costs change in proportionto activity changes.C 28Direct costsCosts traceable to a single cost object.Examples: material and labor cost for a product.Indirect costsCosts that cannotbe traced to asingle cost object.Example: A maintenance expenditurebenefiting two ormore departments.Types of Cost Classifications Classification by TraceabilityC 29 18-C3: Comparing Product and Period Costs 10ProductTypes of Cost Classifications Classification by FunctionDirectLaborDirectMaterialManufacturing OverheadPeriod costs are expenses not attached to the product.Administrative costs arenon-manufacturing costsof staff support andadministrative functions.Selling costs are incurred toobtain orders and to deliverfinished goods to customers.C 311Period and Product Costsin Financial StatementsC 312Identifications of Cost ClassificationsC 313Cost Concepts forService CompaniesC 3The cost concepts described are generally applicable to service organizations. For example, the cost of beverages for passengers of Southwest Airlines is a variable cost based on number of passengers. 14NEED-TO-KNOWFollowing are the costs of a company that manufactures computer chips. Classify each as either a productcost or a period cost. Then classify each of the product costs as direct material, direct labor, or factoryoverhead.1. Plastic board used to mount the chip5. Real estate taxes paid on the factory2. Advertising costs6. Factory supervisor salary3. Factory maintenance workers’ salaries7. Depreciation on factory equipment4. Real estate taxes paid on the sales office8. Assembly worker hourly pay to make chipsDirect MaterialDirect LaborFactory OverheadPeriod Cost1. Plastic board used to mount the chipX2. Advertising costsX3. Factory maintenance workers’ salariesX4. Real estate taxes paid on the sales officeX5. Real estate taxes paid on the factoryX6. Factory supervisor salaryX7. Depreciation on factory equipmentX8. Assembly worker hourly pay to make chipsXProduct CostsProduct CostsAll Factory CostsAssets on Balance SheetPeriod CostsNon-Factory CostsExpensed on Income Statement as Selling, General and AdministrativeC2/C 315Manufacturer’s CostsC 316Example:Steel used in theframe of amountain bike.Direct MaterialsDirect material costs are the expenditures for direct materials that are separately and readily traced through the manufacturing process to finished goods.C 317Example:Wages paid to amountain bike assembly worker.Direct LaborDirect labor costs are the wages and salaries for direct labor that are separately and readily traced through the manufacturing process to finished goods. C 318Examples:Indirect labor – maintenance.Indirect material – cleaning supplies.Factory utility costs.Supervisory costs.Factory OverheadFactory overhead consists of all manufacturing costs that are not direct materials or direct labor and the costs cannot be separately or readily traced to finished goods. C 319DirectMaterialDirectLaborManufacturingOverheadPrimeCostConversionCostManufacturing costs are oftencombined as follows:Prime and Conversion CostsC 320 18-C4: Balance Sheet 21Merchandisers . . .Buy finished goods.Sell finished goods. SaleMartManufacturers . . .Buy raw materials.Produce and sell finished goods.Reporting Manufacturing ActivitiesC 422  MERCHANDISERCurrent AssetsCashReceivablesMerchandise Inventory  MANUFACTURERCurrent AssetsCashReceivablesInventoriesRaw MaterialsGoods in ProcessFinished GoodsThe primary difference is inventory.Manufacturer’s Balance SheetC 423Manufacturer’s Balance SheetCompletedproductsfor sale.Materialswaiting to beprocessed.Can be director indirect.Partially completeproducts.Material to whichsome labor and/oroverhead havebeen added.RawMaterialsFinishedGoodsGoods inProcessC 424 18-P1: Income Statement 25Manufacturer’s Income Statement P 126Cost of Goods Sold for aMerchandiser and Manufacturer P 1Cost of goods sold for manufacturers differs only slightly from cost of goods sold for merchandisers.27NEED-TO-KNOWIndicate whether the following financial statement items apply to a manufacturer, a merchandiser, or aservice provider. Some items apply to more than one type of organization.1. Merchandise inventory 4. Operating expenses2. Finished goods inventory 5. Cost of goods manufactured3. Cost of goods sold 6. Supplies inventoryManufacturerMerchandiserService Provider1. Merchandise inventory X2. Finished goods inventory X3. Cost of goods sold XX4. Operating expensesXXX5. Cost of goods manufacturedX6. Supplies inventoryXXXManufacturerProduces units for saleBalance Sheet includes: Raw Materials Inventory Work in Process Inventory Finished Goods InventoryMerchandiserPurchases units for resaleBalance Sheet includes: Merchandise InventoryService ProviderDoes not provide a product to its customers; no inventories.P 128 18-C5: Flow of Manufacturing Activities 29Activities and Cost Flowsin Manufacturing C 530 18-P2: Schedule of Cost of Goods Manufactured 31Summarizes the types and amounts of costsincurred in a company’s manufacturing process.Schedule of Cost of Good Manufactured Direct Materials Used + Direct Labor + Factory Overhead = Total Manufacturing Costs + Beginning Work in Process – Ending Work in Process = Cost of Goods ManufacturedP 232Manufacturing StatementP 233P 2Manufacturing Statement34Include all direct labor costs incurred during the current period.Manufacturing StatementP 235Manufacturing StatementP 236Manufacturing StatementP 237Overhead Cost Flows Across Accounting ReportsP 238NEED-TO-KNOWCompute the following three measures using the information below.1. Cost of materials used2. Cost of goods manufactured3. Cost of goods soldBeginning raw materials inventory$15,500Ending raw materials inventory$10,600Beginning work in process inventory29,000Ending work in process inventory44,000Beginning finished goods inventory24,000Ending finished goods inventory37,400Raw materials purchased66,000Direct labor used38,000Total factory overhead used80,000Beg. Inv.15,500Beg. Inv.29,000Beg. Inv.24,000Purchases66,000Matls. Used70,900Cost of GM173,900Direct Labor38,000Fact. OH80,000Avail for Use81,500Avail for Mfg.217,900Avail for Sale197,900Matls. Used70,900Cost of GM173,900Cost of GS160,500End. Inv.10,600End. Inv.44,000End. Inv.37,400Finished Goods InventoryCost of Direct Materials transferred from Raw Materials Inventory to Work in Process Inventory.Cost of goods completed in the current period and transferred from Work in Process Inventory to Finished Goods Inventory.Cost of goods leaving Finished Goods Inventory and going to the customer. Expensed on the income statement.Raw Materials InventoryWork in Process Inventory$70,900$173,900$160,500P1/P 239NEED-TO-KNOWBeg. Inv.15,500Beg. Inv.29,000Beg. Inv.24,000Purchases66,000Matls. Used70,900Cost of GM173,900Direct Labor38,000Fact. OH80,000Avail for Use81,500Avail for Mfg.217,900Avail for Sale197,900Matls. Used70,900Cost of GM173,900Cost of GS160,500End. Inv.10,600End. Inv.44,000End. Inv.37,400Finished Goods InventoryRaw Materials InventoryWork in Process InventoryBalance SheetCurrent assets:Raw Materials Inventory$10,600Work in Process Inventory44,000Finished Goods Inventory37,400Income StatementSales$XXXXXCost of Goods Sold(160,500)P1/P 240 18-C6: Trends in Managerial Accounting 41Trends in Managerial AccountingCustomer OrientationE-CommerceGlobal EconomyService EconomyLean PracticesValue ChainC 642Customer OrientationC 643Quality improvementapplied to all aspects ofbusiness activities.Seek and uncover waste.Employees encouragedto try new methodsto improve quality.Company emphasizesvalue of quality throughquality awards.Total Quality ManagementC 6Constant Focus on Higher Standards44Complete productsjust-in-time toship to customersComplete partsjust-in-time forassembly into productsSchedule ProductionReceive materialsjust-in-time forproductionReceivecustomerordersJust-In-Time (JIT) ManufacturingC 645Value ChainThe value chain refers to the series of activities that add value to a company’s products or services. Companies can use lean practices to increase efficiency and profits.C 646Global View47 18-A1: Raw Materials Inventory Turnover and Days’ Sales 48Raw Materials Inventory TurnoverA1Raw materialsInventory turnover = Raw materials usedAverage materials inventory49End of Chapter 1850