akuntansi manajemen edisi 8 oleh hansen & mowen bab 7
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Akuntansi Manajemen Edisi 8 oleh Hansen & Mowen Bab 7 Support Departement Cost AllocationTRANSCRIPT
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PowerPointPowerPoint Presentation by Presentation by
Gail B. WrightGail B. WrightProfessor Emeritus of AccountingProfessor Emeritus of AccountingBryant UniversityBryant University
© Copyright 2007 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star Logo, and
South-Western are trademarks used herein under license.
MANAGEMENT ACCOUNTING
8th EDITION
BY
HANSEN & MOWEN
7 SUPPORT-DEPARTMENT COST ALLOCATION
STUDENT EDITION
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1. Describe the difference between support departments and producing departments.
2. Calculate single & multiple charging rates for a support department.
3. Allocate support-department costs to producing departments using the direct, sequential, & reciprocal methods.
LEARNING OBJECTIVESLEARNING OBJECTIVES
Continued
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4. Compute departmental overhead rates.
5. Describe the allocation of joint costs to products. (Appendix).
LEARNING OBJECTIVESLEARNING OBJECTIVES
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ALLOCATION: DefinitionALLOCATION: Definition
A means of dividing a pool of costs & assigning it to various
subunits.
LO 1
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COST ALLOCATION
While cost allocation does not affect total product cost, it will affect pricing & profitability of individual products depending on method used.
While cost allocation does not affect total product cost, it will affect pricing & profitability of individual products depending on method used.
LO 1
Price & Profitability
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COMMON COSTS: DefinitionCOMMON COSTS: Definition
Mutually beneficial costs which occur when the same resource is
used in output of 2 or more services or products.
LO 1
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How are overhead costs treated for producing & support
departments?
Once producing & support departments are identified,
overhead costs are traced, not allocated to each department.
LO 1
traced, notallocated
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CAUSAL FACTORS: DefinitionCAUSAL FACTORS: Definition
Activities within a producing department that provoke the incurrence of support service
costs.
LO 1
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How are costs allocated from departments to products?
First, support department costs are assigned to producing
departments. Then overhead rates are developed to cost
products.
LO 1
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COMPETITIVE PRICING
Requires understanding costsOverstating leads to loss of businessUnderstating produces losses
Leads to evaluating product or service mixDropping some servicesReallocating resourcesRepricing
LO 1
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What kinds of charging rates are used?
Companies use either a single charging rate or multiple
charging rates.
LO 2
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PHOTOCOPYING DEPT.: Barry & Hamilton
PHOTOCOPYING DEPT.: Barry & Hamilton
LO 7
Service department usage
Audit department 94,500
Tax department 67,500
MAS department 108,000
Total 270,000
Costs
Fixed $ 26,190
Estimated variable 6,210
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FORMULAS: Single Charging Rate
Charging rate =
Total estimated costs / Estimated usage
$ 32,400 / 270,000 = $0.12 per page
LO 2
Allocating charges:
# Actual Pages x Charging rate
= Allocated charges
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CHARGE ALLOCATION: Single Charging Rate
CHARGE ALLOCATION: Single Charging Rate
Dept
Actual
# Pages
Charge Rate
Total Charges
Audit 92,000 $ 0.12 $ 11,040
Tax 65,000 0.12 7,800
MAS 115,000 0.12 13,800
Total 272,000 $ 32,640
LO 2
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What do you need to know to use multiple charging rates?
Multiple charging rates require that causal factors are known.
LO 2
causal factors
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FORMULAS: Multiple Charging Rates
Peak usage =
Average usage Audit + MAS 16875
Peak usage, Tax 22,500
Peak usage 39,375
LO 2
Allocating charges:
Fixed costs = Proportion Peak x Fixed Cost
Variable costs = Estimated Variable cost x Actual page usage
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What are the uses of budgeted costs?
Budgeted costs are used 1) to help determine overhead rate and 2) for service department
performance evaluation.
LO 2
help determine overhead rate
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Actual costs should be used for performance evaluation.
Budgeted costs should be used for product costing.
LO 2
When should actual & budgeted costs be used?
Actual costs
Budgeted costs
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ALLOCATION METHODS: Multiple Service Departments
Direct allocation methodAllocate support department costs only to
producing departments
Sequential allocation methodAllocate support department costs in step-down
approach
Reciprocal allocation method
LO 3
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ALLOCATION: Direct Method Step 1
LO 3
Develop allocation ratios for support department costs.
EXHIBITEXHIBIT 7-87-8
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ALLOCATION: Direct Method Step 2
LO 3
EXHIBITEXHIBIT 7-87-8
Prorate support department costs to producing depts.
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ALLOCATION: Sequential Method Step 1
LO 3
EXHIBITEXHIBIT 7-107-10
Allocate support depts. costs to other departments in order of rankings.
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ALLOCATION: Sequential Method Step 2
LO 3
EXHIBITEXHIBIT 7.107.10
Allocate support depts. costs to other departments in order of rankings.
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FORMULAS: Multiple Charging Rates
Allocate each supporting department’s costs to all other departments before allocating supporting departments’ costs to producing departments.
LO 3
Allocating Power & Maintenance charges:
P = Direct costs + Share of M. costs
M = Direct costs + Share of P. costs
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COSTING PROCESS
LO 4
Has following stepsIdentify supporting and producing
departmentsAllocate supporting department costs to
producing departmentsAllocate overhead to producing departments
at predetermined rates
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ACCOUNTING FOR JOINT PRODUCT COSTS
LO 5
3 methodsPhysical units: joint costs distributed on basis of
physical unitsSales-value-at-split-off: joint costs distributed on
basis of sales value at split-offNet realizable value: joint costs distributed on
basis of hypothetical sales valueBy-products: because insignificant sales value,
no joint cost allocation
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THE ENDTHE END
CHAPTER 7