初级国际会计第二章全英文课件

CHAPTER 2An Introduction to Cost Terms and Purposes1Basic Cost TerminologyCost sacrificed resource to achieve a specific objectiveActual Cost a cost that has occurredBudgeted Cost a predicted costCost Object anything of interest for which a cost is desired2Basic Cost TerminologyCost Accumulation a collection of cost data in an organized mannerCost Assignment a general term that includes gathering accumulated costs to a cost object.This includes:Tracing accumulated costs with a direct relationship to the cost object and Allocating accumulated costs with an indirect relationship to a cost object3Direct and Indirect CostsDirect Costs（直接计入成本）CAN be conveniently and economically traced(tracked)to a cost objectIndirect Costs（间接计入成本）CANNOT be conveniently or economically traced(tracked)to a cost object.Instead of being traced,these costs are allocated to a cost object in a rational and systematic manner4Cost ExamplesDirect Costs PartsAssembly line wagesIndirect CostsElectricityRentProperty taxesDirect SpecificIndirect-Common5Direct and Indirect CostsSeveral factors affect the classification of a cost as direct or indirect:The materiality of the cost in questionAvailable information-gathering technologyDesign of operationsContractual arrangementsThe direct/indirect classification depends on the choice of the cost object.6Direct and Indirect CostsThe direct/indirect classification depends on the choice of the cost object.Example:Lee Xin Nutritious Food Ltd.Packaged Chicken Spicy Chicken&Lemon ChickenPackaged Duck Baked Duck&Pickled DuckEtcBoth chicken and duck are raw materials for the two products.7Direct and Indirect CostsThe direct/indirect classification depends on the choice of the cost object.If spicy chicken and pickled duck are the cost objects,chicken and duck are _ cost.However,If packaged chicken and packaged duck are the cost objects,chicken and duck are _ cost.Read the example about the Assembly Read the example about the Assembly Department Supervisors salary on Page 21.Department Supervisors salary on Page 21.8Cost Behavior(成本性态)Variable Costs（变动成本）changes in total in proportion to changes in the related level of activity or volumeFixed Costs（固定成本）remain unchanged in total regardless of changes in the related level of activity or volumeCosts are fixed or variable only with respect to a specific activity or a given time period9Cost BehaviorVariable costs are constant on a per-unit basis.If a product takes 5 pounds of materials each,it stays the same per unit regardless of whether one,ten,or a thousand units are producedFixed costs change inversely with the level of production.As more units are produced,the same fixed cost is spread over more and more units,reducing the cost per unit10Cost Behavior*Formulate the total and unit variable cost,and total and unit fixed cost respectively based on the Cost Theory that you have learned in Microeconomics.11Cost Behavior SummarizedTotal DollarsCost per UnitVariable CostsChange in proportion with outputMore output=More costUnchanged in relation to outputFixed CostsUnchanged in relation to outputChange inversely with outputMore output=lower cost per unitTotal DollarsCost per UnitVariable CostsChange in proportion with outputMore output means More costUnchanged in relation to outputFixed CostsUnchanged in relation to outputChange inversely with outputMore output means lower cost per unit12Total Costs and Unit CostsA unit cost(also called an average cost)is computed by dividing some amount of cost total by some number of units.The units may be expressed in various ways:Hours workedPackages deliveredBicycles assembled13Total Costs and Unit CostsWhat is the unit cost(leasing and handlebars)when Metairie Bicycles assembles 1,000 bicycles?Total fixed cost$94,500+Total variable cost$52,000=$146,500$146,500/1,000=$146.5014Total Costs and Unit CostsTotal costs($000)$146.5$94.5 0 1,000 Volume15Use Unit Costs CautiouslyAssume that Metairie Bicycles management uses a unit cost of$146.50(leasing and handlebars).Management is budgeting costs for different levels of production.16Use Unit Costs CautiouslyWhat is their budgeted cost for an estimated production of 600 bicycles?600*$146.50=$87,900What is their budgeted cost for an estimated production of 3,500 bicycles?3,500*$146.50=$512,75017Use Unit Costs CautiouslyWhat should the budgeted cost be for an estimated production of 600 bicycles?Total fixed cost$94,500 Total variable cost($52*600)=31,200 Total$125,700$125,700/600=$209.50Using a cost of$146.50 per unit would underestimate actual total costs if output is below 1,000 units.18Use Unit Costs CautiouslyWhat should the budgeted cost be for an estimated production of 3,500 bicycles?Total fixed cost$94,500 Total variable cost(52*3,500)=182,000 Total$276,500$276,500/3,500=$79.0019Use Unit Costs CautiouslyUsing a cost of$146.50 per unit instead of$79.00 would overestimate actual total costs if output is above 1,000 units.For decision making,managers should think in terms of total costs rather than unit costs.20A Cost CaveatUnit costs should be used cautiously.Since unit costs change with a different level of output or volume,it may be more prudent to base decisions on a total dollar basis.What is your view on this problem?21Relationships of Types of CostsDirectIndirectVariableFixed22Other Cost ConceptsCost DriverCost Driver a variable that causally affects costs over a given time span(Explained in CH5)Relevant RangeRelevant Range the band of normal activity level(or volume)in which there is a specific relationship between the level of activity(or volume)and a given cost(Explained in CH 10)For example,fixed costs are fixed only within the relevant range.23Different Types of FirmsManufacturing-sector companies create and sell their own productsMerchandising-sector companies product resellersService-sector companies24Types of InventoriesDirect Materials resources instock and available for useWork-in-Process(or progress)products started but not yet completed.Often abbreviated as WIPFinished Goods products completed and ready for sale25Types of Product CostsDirect MaterialsDirect LaborIndirect Manufacturing factory costs that are not traceable to the product.Also known as Manufacturing Overhead costs or Factory Overhead costs26Distinctions Between CostsInventoriable Costs product manufacturing costs.These costs are capitalized as assets(inventory)until they are sold and transferred to Cost of Goods SoldPeriod Costs have no future value and are expensed as incurred27Cost FlowsThe Cost of Goods Manufactured and the Cost of Goods Sold section of the income statement are accounting representations of the actual flow of costs through a production system.Note the importance of inventory accounts in the following accounting reports,and in the cost flow chart28Categories of InventoryGeneral formula:Beginning inventory Beginning inventory+Input(pInput(purchaseurchase,manufacture,etc),manufacture,etc)-Ending inventory Ending inventory=Cost of transferred(sold,consumed,etc)Cost of transferred(sold,consumed,etc)OROR Cost of inventory items available for transferCost of inventory items available for transfer-Ending inventory Ending inventory=Cost of transferred(sold,consumed,etc)Cost of transferred(sold,consumed,etc)29Categories of InventoryConcrete steps:1.Direct materials inventory:Beginning direct materials inventory Beginning direct materials inventory+Purchases of direct materials Purchases of direct materials Ending direct materials inventory Ending direct materials inventory=Direct materialsDirect materials usedusedOR:OR:Cost of direct materials available for useCost of direct materials available for useEnding direct materials inventory Ending direct materials inventory=Direct materials usedDirect materials used30Categories of Inventory2.Work-in-process inventory:Beginning work-in-process inventory Beginning work-in-process inventory+Total Total Manufacturing costsManufacturing costs(DM used+DL+MO)(DM used+DL+MO)-Ending work-in-process inventory Ending work-in-process inventory=Cost of goods manufacturedCost of goods manufacturedOR:OR:Total manufacturing cost account forTotal manufacturing cost account forEnding Ending work in processwork in process =Cost of goods manufacturedCost of goods manufactured31Categories of Inventory3.Finished goods inventory:Beginning finished goods inventory Beginning finished goods inventory+Cost of goods manufactured Cost of goods manufactured Ending finished goods inventory Ending finished goods inventory=Cost of goods soldCost of goods soldOR:OR:Cost of goods available for saleCost of goods available for saleEnding finished goods inventory Ending finished goods inventory=Cost of goods soldCost of goods sold32Problem for Self-Study1.Demonstration of Computing Inventories1.Demonstration of Computing InventoriesDM Inventory:$40k+$460k$50k$40k+$460k$50k=$500k-$50k=$450k=$500k-$50k=$450kW-I-P Inventory:$10k+($450k+$300k+$214k)$14k$10k+($450k+$300k+$214k)$14k=$974k-$14k=$960k=$974k-$14k=$960kF.G.$100k+$960k$150k$100k+$960k$150k=$1060k 150k=$910k=$1060k 150k=$910k33Problem for Self-Study2.Demonstration of Computing unit costs2.Demonstration of Computing unit costsUnit of DM cost:$450k/900k=$0.5$450k/900k=$0.5Unit plant-leasing cost:$54k/900k=$0.06$54k/900k=$0.063.Demonstration of total costs:3.Demonstration of total costs:Budgeted total DM cost:$0.51000k=$500k$0.51000k=$500kBudgeted total plant-leasing cost:P47$54000$5400034Cost Flowchart35Other Cost ConsiderationsPrime costPrime cost is a term referring to all direct manufacturing costs(labor and materials)Conversion costConversion cost is a term referring to direct labor and factory overhead costs,collectivelyPrime&conversion cost will be discussed in Chapter 17&18(process costing system).Overtime labor costs are considered part of overhead36Different Definitions of Cost for Different ApplicationsPricing and product-mix decisions may use a“super”cost approach(comprehensive)Contracting with government agencies very specific definitions of cost for“cost plus profit”contractsPreparing external-use financial statements GAAP-driven product costs only37Three Common Features of Cost Accounting and Cost ManagementCalculating the cost of products,services,and other cost objectsObtaining information for planning and control,and performance evaluationAnalyzing the relevant information for making decisions38。