صفحه 1:
9۹ Kerrey bela nele)
Foundations and
۳ Evolutions
Kinney, Prather, Raiborn
CAO LOG 100 7
Chapter 5
Activity-Based Management
and Activity-Based Costing
صفحه 2:
ie.
۰
5
* Identify the focus of activity-based
management
¢ Explain why non-value-added
activities cause costs to increase
unnecessarily
* Explain why cost drivers are
designated in activity-based costing
صفحه 3:
ie.
۰
5
* Contrast activity-based costing to
the traditional cost accounting
system
ار الات للك
provided by an activity-based
costing/management system
° Explain when it is appropriate to
DLO ine rome meee ite)
صفحه 4:
یت
* Focuses on activities during
production and performance
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* Improves the value received by
customers
¢ Enhances profitability
صفحه 5:
ie.
۰
5
(ON Re ا لجوسسخللوم مصاصه جلطلاص مص هط لان
۱ mM aC ceca NOS LCA
صفحه 6:
صفحه 7:
الم مانن
Increased customer value -
Enhanced profitability -
* Internal Benefits
- More efficient production
- More accurate cost determination
- More effective performance
evaluation
صفحه 8:
Non-value-added activity
* Increases time spent on
product or service but
does not increase worth
* Unnecessary from
customer perspective
* Can be reduced,
0 ی
without affecting market
BCT كاك ىن
* Business-value-added
activities are essential
۰ | worth
of product or
service toa
customer
* Customer is
gar to pay for
صفحه 9:
* Cost drivers are factors that have a
direct cause-effect relationship to a
تفت
اس اك ا ان اا
- Cost of measurement should not exceed
benefit of using the cost driver
- Easy to understand
~ Directly related to activity being
حدم وم
- Appropriate for measurement
صفحه 10:
* Unit-level costs
- direct material, direct labor
* Batch-level costs
- setup, inspection
+ Product/process-level costs
- engineering changes, product
development
* Organizational or facility costs
- building depreciation, plant manager's
Chay
صفحه 11:
* Recognizes several levels of costs
* Accumulates costs into related
cost pools
* Uses multiple cost drivers to
assign costs to products and
services
صفحه 12:
* Collect costs in general ledger and
subsidiary accounts
* Identify activity centers
* Accumulate costs into activity
center cost pools - cost drivers
* Allocate costs to products and
services
- وع7ناكة 226 2151ل انامه 5
placed on activities, thus, the resources
consumed by products/services |
صفحه 13:
ie.
۰
5
Damas
* When ABC implemented
- Cost reduced for high volume,
standard products
- Cost increased for low-volume,
complex specialty products
صفحه 14:
1. Product Variety and Process
Complexity
- Caused by mass customization
* Too many choices, opportunity for errors
+ Pareto Principle
+ Commonality of parts
- Reduced by
+ Simultaneous (or Concurrent)
Engineering
* Design for Manufacturability
صفحه 15:
2. Lack of Commonality in Overhead Costs
- Some products/services use substantially
سقط 076220 ممص 5
3. Problems with Current Cost Allocations
- Significant changes in process with no
change in cost allocations
ERB cb عمط ا ل ا ا
incurred
صفحه 16:
4. Changes in Business
Environment
- Increase in competition
- Change in management strategy
صفحه 17:
* Eliminates non-value-added activities
to reduce cycle time
* Makes products/performs services with
zero defects
* Reduces product costs on an ongoing
دا
* Simplifies products and processes
ABC Costing Supports
Continuous Improvement.
صفحه 18:
ie.
۰
5
° Significant amount of time and
cost to implement
* Must overcome barriers to change
* Does not conform to GAAP
* May not promote total quality
management
صفحه 19:
جم ان مامه امه 141501557 د
technology costs
* Trace technology costs directly to
products
* Identify the cost drivers that create or
influence cost
٠ Identify activities that do not contribute
to perceived customer value
صفحه 20:
* Illustrate the impact of new technologies
on all elements of performance
* Translate company goals into activity
goals
* Analyze the performance of activities
across business functions
* Analyze performance problems
* Promote standards of excellence
صفحه 21:
ie.
۰
5
* What are the differences between
activity-based costing and
traditional cost accounting?
* What are cost drivers and activity
drivers?
* What are two advantages and two
criticisms of activity-based costing?