Bài giảng môn Kế toán, kiểm toán - Chapter 15: Cost control

1© 2008 The McGraw-Hill Companies, Inc., All Rights Reserved.Chapter 15Cost ControlPowerPoint Authors: Susan Coomer Galbreath, Ph.D., CPA Charles W. Caldwell, D.B.A., CMA Jon A. Booker, Ph.D., CPA, CIA Cynthia J. Rooney, Ph.D., CPAActivityBudgetAmountActualAmountExplanation—=FavorableActual revenues > Budgeted revenuesActual costs Budgeted costsVarianceLO 2Performance Report Characteristics 15-3The vice president of operations receives summarized information from each store. Management by exception: Upper-level management does not receive operating detail unless activities are not performing according to plan.LO 2Performance Report Characteristics Responsibility ReportingAmount of detail varies according to level in the organization.15-4Improve performance evaluation.May be prepared for any activity level within the relevant range.Show revenues and expensesthat should have occurred at theactual activity. Reveal variances due to effective cost control or lack of cost control.LO 3The Flexible Budget15-5 To a budget for different activity levels, we must know how costs behave with changes in activity levels.Total variable costs changein direct proportion to changes in activity.Total fixed costsremain unchangedwithin the relevantrange. FixedVariableLO 3The Flexible Budget15-6Standard Costs are Based on carefullypredetermined amounts.Used for planning material, labor, and overhead requirements.The expected levelof performance.Benchmarks formeasuring performance.LO 4Standard Cost Variance Analysis15-7Cost per Unit ofInput VarianceStandard Cost VariancesThe difference betweenthe actual price and thestandard priceQuantityVarianceThe difference betweenthe actual quantity andthe standard quantityLO 4Standard Cost Variance Analysis15-8 Actual Quantity Actual Quantity Standard Quantity × × ×  Actual Price Standard Price Standard PriceCost per Unit ofInput VarianceQuantityVarianceStandard price is the amount that should have been paid for the resources acquired.LO 4Standard Cost Variance Analysis15-9 Actual Quantity Actual Quantity Standard Quantity × × ×  Actual Price Standard Price Standard PriceStandard quantity is the quantity that shouldhave been used for the output achieved. LO 4Standard Cost Variance AnalysisCost per Unit ofInput VarianceQuantityVariance15-10 AQ(AP - SP) SP(AQ - SQ) AQ = Actual Quantity SP = Standard Price AP = Actual Price SQ = Standard Quantity LO 4Standard Cost Variance Analysis Actual Quantity Actual Quantity Standard Quantity × × ×  Actual Price Standard Price Standard PriceCost per Unit ofInput VarianceQuantityVariance15-11Budget VarianceVolumeVariancePOHAR = Fixed Overhead Application RateSH = Standard Hours Allowed SH × POHAR  Actual Fixed Fixed Fixed Overhead Overhead Overhead  Incurred Budget Applied LO 6Analysis of FixedOverhead Variances15-12Product cost included inProduction inefficiency costs recognized as aCurrent PeriodExpenseCost of GoodsSoldInventorySignificant Net UnfavorableVariance andcurrent standardsInsignificant Net VarianceLO 7Accounting for VariancesSignificant Net VarianceProduct cost allocated between15-13CostCenterActual costs are compared to budgeted costsProfitCenterInvestmentCenterActual return on investmentis compared to budgetedreturn on investmentEvaluation MeasuresActual segment margin iscompared to budgetedsegment marginSegmentLO 8Methods of Evaluating Segments15-14 Return on investment (ROI) is the ratio ofsegment margin to the investment used to generate the segment margin.ROI = Segment marginDivisional operating assetsLO 9Analysis of Investment Centers15-15SalesOperating assetsROI = Segment MarginOperating assetsROI = Segment marginSales×MarginTurnoverLO 9Analysis of Investment Centers15-16Segment marginless required returnon operating assetsLO 9Residual Income – Another Measure15-17Financial PerspectiveHow do we lookto the firm’s owners?Learning and Growth PerspectiveHow can we continuallyimprove and create value?Internal BusinessProcess PerspectiveIn which activities must we excel?Customer PerspectiveHow do our customers see us?IntegratedmeasuresLO 10The Balanced Scorecard15-18End of Chapter 1515-19