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    Cost Sample

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    parulvijay
    Manufacturing cost Accounting Superfactory Excellence Program(tm) www.superfactory.com (c) 2004 Superfactory(tm). All Rights Reserved. Outline cost Terms, Concepts, and Classifications Job Order Costing Cost Behavior Cost - Volume - Profit Activity Based Costing Profit Planning Standard Costs Flexible Budgets and Overhead Analysis Relevant Costs for Decision-making.

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    Cost Sample

    Uploaded by

    parulvijay
    56 views10 pages
    Manufacturing cost Accounting Superfactory Excellence Program(tm) www.superfactory.com (c) 2004 Superfactory(tm). All Rights Reserved. Outline cost Terms, Concepts, and Classifications Job Order Costing Cost Behavior Cost - Volume - Profit Activity Based Costing Profit Planning Standard Costs Flexible Budgets and Overhead Analysis Relevant Costs for Decision-making.

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    Manufacturing cost Accounting Superfactory Excellence Program(tm) www.superfactory.com (c) 2004 Superfactory(tm). All Rights Reserved. Outline cost Terms, Concepts, and Classifications Job Order Costing Cost Behavior Cost - Volume - Profit Activity Based Costing Profit Planning Standard Costs Flexible Budgets and Overhead Analysis Relevant Costs for Decision-making.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPT, PDF, TXT or read online from Scribd
    Download as ppt, pdf, or txt
    56 views10 pages

    Cost Sample

    Uploaded by

    parulvijay
    Manufacturing cost Accounting Superfactory Excellence Program(tm) www.superfactory.com (c) 2004 Superfactory(tm). All Rights Reserved. Outline cost Terms, Concepts, and Classifications Job Order Costing Cost Behavior Cost - Volume - Profit Activity Based Costing Profit Planning Standard Costs Flexible Budgets and Overhead Analysis Relevant Costs for Decision-making.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPT, PDF, TXT or read online from Scribd
    Download as ppt, pdf, or txt
    of 10

    Manufacturing Cost Accounting

    Superfactory Excellence Program™


    www.superfactory.com

    © 2004 Superfactory™. All Rights Reserved. 1


    Outline

     Cost Terms, Concepts, and Classifications


     Job Order Costing
     Cost Behavior
     Cost – Volume – Profit
     Activity Based Costing
     Profit Planning
     Standard Costs
     Flexible Budgets and Overhead Analysis
     Relevant Costs for Decision-Making

    © 2004 Superfactory™. All Rights Reserved. 2


    Product Costs - A Closer Look

    Manufacturing Work
    Raw Materials Costs In Process

    Beginning raw Direct materials Beginning work in


    materials inventory + Direct labor process inventory
    + Raw materials + Mfg. overhead + Total manufacturing
    purchased = Total manufacturing costs
    = Raw materials costs = Total work in
    available for use process for the
    in production period
    – Ending work in
    process inventory
    = Cost of goods
    manufactured.
    Costs
    Costsassociated
    associatedwith
    withthe
    the goods
    goods that
    that
    are
    arecompleted
    completed during
    duringthe
    the period
    period are
    are
    transferred
    transferredto
    tofinished
    finished goods
    goods
    inventory.
    inventory.
    © 2004 Superfactory™. All Rights Reserved. 3
    The Contribution Format

    Total Unit
    Sales Revenue $ 100,000 $ 50
    Less: Variable costs 60,000 30
    Contribution margin $ 40,000 $ 20
    Less: Fixed costs 30,000
    Net income $ 10,000

    The contribution margin format emphasizes cost


    behavior. Contribution margin covers fixed costs
    and provides for income.
    © 2004 Superfactory™. All Rights Reserved. 4
    Calculating Breakeven in Units

    Here is the information from Wind Bicycle Co.:

    Total Per Unit


    Sales (500 bikes) $250,000 $ 500
    Less: variable expenses 150,000 300
    Contribution margin $100,000 $ 200
    Less: fixed expenses 80,000
    Net income $ 20,000

    © 2004 Superfactory™. All Rights Reserved. 5


    The Master Budget

    Sales
    Budget

    Ending Selling and


    Production
    Inventory Administrative
    Budget
    Budget Budget

    Direct Direct Manufacturing


    Materials Labor Overhead
    Budget Budget Budget

    Cash
    Budget

    Budgeted Financial Statements


    © 2004 Superfactory™. All Rights Reserved. 6
    The Direct Materials Budget

    April May June


    Production 26,000 46,000 29,000
    Materials per unit 5 5 5
    Production needs 130,000 230,000 145,000
    Add desired
    ending inventory 23,000 14,500 11,500
    Total needed 153,000 244,500 156,500
    Less beginning
    inventory 13,000 23,000 14,500
    Materials to be
    purchased 140,000 221,500 142,000

    © 2004 Superfactory™. All Rights Reserved. 7


    Labor Variances Summary

    Actual Hours Actual Hours Standard Hours


    × × ×
    Actual Rate Standard Rate Standard Rate
    1,550 hours 1,550 hours 1,500 hours
    × × ×
    $6.20 per hour $6.00 per hour $6.00 per hour
    = $9,610 = $9,300 = $9,000

    Rate variance Efficiency variance


    $310 unfavorable $300 unfavorable
    © 2004 Superfactory™. All Rights Reserved. 8
    Flexible Budget
    Performance Report
    CheeseCo
    Cost Total
    Formula Fixed Flexible Actual
    Per Hour Costs Budget Results Variances
    Machine hours 8,000 8,000 0
    Variable costs
    Indirect labor $ 4.00 $ 32,000 $ 34,000 $ 2,000 U
    Indirect material 3.00 24,000 25,500 1,500 U
    Power 0.50 4,000 3,800 200 F
    Total variable costs $ 7.50 $ 60,000 $ 63,300 $ 3,300 U
    Fixed Expenses
    Depreciation $ 12,000 $ 12,000 $ 12,000 0
    Insurance 2,000 2,000 2,050 50 U
    Total fixed costs $ 14,000 $ 14,050 50 U
    Total overhead costs $ 74,000 $ 77,350 $ 3,350 U

    © 2004 Superfactory™. All Rights Reserved. 9


    Utilization of a Constrained Resource

    Let’s calculate the contribution margin per unit of the scarce


    resource, machine A1.

    IfIf there
    there are
    are no
    no other
    other considerations,
    considerations, the
    the best
    best
    plan
    plan would
    would be
    be to
    to produce
    produce toto meet
    meet current
    current
    demand
    demand for
    for Product
    Product 22 and
    and then
    then use
    use
    remaining
    remaining capacity
    capacity to
    to make
    make Product
    Product 1.
    1.

    © 2004 Superfactory™. All Rights Reserved. 10

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