管理会计-上海对外经贸大学参赛案例分析课件.ppt

1、WAYto beBETTER FOODProduct Costing at Fine FoodsOUTLINESpecial Order Dealing Cost AllocationPerformance EvaluationProduction Schedule ModificationCost Driver ModificationEvaluation System ModificationRecommendations SummaryPreparingActivityWarehousingActivityProcessingActivityPackagingActivityPart o

2、f Variable Operating Cost1.Direct Costs & Indirect Costs2. MP & Other ProductsPart of Material CostDirect costs Cost driverRaw material Material cost for one unit Packaging material Material cost for one unit Direct production salaries Labor time for one unit Indirect costsCost driverElectricity, St

3、eamEstimateWaterEstimateWarehouseEstimateInaccurate！Straight to products, reasonable?Steam boilersVehiclesSanitationFactoryProduct Groups ProductsProductsAssigned to factories by usage of activityFixed percentage2I3WeightRemaining costFixed percentageWeightUnfair !Straight to products, reasonable?Pr

4、oduction timeVariable operating Cost driverFreight out Weight of product shipped to productMedia and sales production costs Weight of product sold to productFixed operating Cost driverSales and marketing cost Sales volume to productTop management Business administration Information systemsHuman reso

5、urcesSupply management, etc.Unfair !Really to products?Break the limits between product and department1Operating costs Products Some cost drivers are unfair and inaccurate2Some costs cant be straightly traced to product3Heavy product Higher cost Estimate Accurate Should be first allocated to product

6、 groups, then to productsCost CenterManufacturingOperatingDirect manufacturingIndirect manufacturingCorporateSMUVariableFixedFixedFixedVariableLaborMaterial PackageProductRaw materialPackage materialLaborCost for 1 unit Cost for 1 unitLabor for 1 unitFreight outMedia and PromotionCurrentRecommendati

7、onCurrentRecommendationWeightWeightDistancePromotion timeCurrentRecommendationSales and marketingCorporate levelSales volumeIncludedLabor timeExcludeUnchangedUnchangedUnchangedDirect ManufacturingVariable OperatingFixed OperatingThere can be more than only one cost driver, and more reasonable cost d

8、river.!Assign toIndirect Manufacturing CostCost ObjectCost ObjectCost ObjectCost ObjectCost ObjectCost ObjectDue to limited information, ABC is hard to implement.!ElectricitySteamWaterWarehousingVariableProduct GroupProduct GroupFixedMaintenanceWorkshop storageProduction lineProduction line Clearing

9、EngineeringManagementEnvironmentQualityProduct GroupProduct GroupProduct GroupProductUsageVolumeTimeProduction TimePro-rataCost Pool1. Considerations on Special Orders3. Analysis and Recommendations2. Problems & Benefits of Special OrdersAccountingFreightDirectmaterial OverheadDirectlabor 1. Conside

10、rations on Special OrdersOthers1. Considerations on Special OrdersJoint Product One-time OrderOpportunity CostIdle CapacityOther ConsiderationsLong-term RelationshipShort-term Pricing2. Benefits of Special OrdersRaw Raw Material Material Long Long PreservedPreservedFlexibilityIdle Idle CapacityCapac

11、ity Well UsedWell UsedEfficiencySpecial Order Special Order Avant-garde for a Avant-garde for a New MarketNew MarketStrategic DevelopmentMP Niche MP Niche Market in Market in MexicoMexicoMarket ShareNet salesVariable manufacturingFixed manufacturingFreight outContribution margin 1Request for these s

12、pecial orders come unexpectedlyRight nowChange toNet salesVariable manufacturingFreight outContribution margin 1ChangeAccepts when CM1 0Orders can be rejected within one year before deliveryDefault Risk!2. Problems Of Special OrdersMultiple choiceProduce in advance for storageBrand product MPproduct

13、 MPDevelop new Develop new market market through special orderspecial order3. Analysis and RecommendationsCarrying CostRestocking Cost QuantityCostEOQMinimize the inventory cost(Economic Optimal Quantity)Multiple choiceProduce in advance for storageBrand product MPDevelop new market through special

14、order3. Analysis and RecommendationsMultiple choiceProduce in advance for storageBrand product MPDevelop new market through special order3. Analysis and RecommendationsResponsibility CenterEvaluation MethodAgency CostsSignificant Points in Performance EvaluationCost CenterRevenue CenterProfit Center

15、Investment CenterIn order to know how well a entity performs, you have to first know its responsibility, and judge it only by this. Which one applies?In different occasions, different methods of evaluation should be used, which one applies?Contribution MarginOperating ProfitReturn on InvestmentEVACo

16、nflict of interest between the company owner and the manager, usually results from asymmetric information. Any possibility of existing in Fine Foods?1 13 32 2What types of centers are SMUs?1FactoryDecisionCenterOperating Cost CenterManufacturingCost CenterOperating CostRevenueProfit CenterIndividual

17、-based vs Team-based Evaluation2Problem in Fine Food No emphasis on the team performance of evaluation is found.Fine Foods should pay more attention to employees, not on managers and SMU as a unit! We recommend Fine Foods set up a file recording the contributions, improvements accomplishments the em

18、ployee has made, set different weight to them, and give the whole team an overall score and reward them。ANon Financial Evaluation Method2 For food producer like Fine Foods, the quality and safety of the products are first priority.! Quality: Protein, Fat, Water, Carbohydrate Safety: Pesticide Residu

19、es Heavy Metal Residues Micro-organismBFinancial Evaluation Method2Contribution MarginROI, EVAOperating ProfitSales minus variable costs, but ignores fixed costs, not a good method for SMU as a whole Need to know the capital employed and the financing cost, not a good method for only a unit in a com

20、panyNot only takes account of variable costs but also fixed costs, good for SMU, but needs to be modified and take the controllable profit into considerationcAccountNet salesVariable manufacturing costFixed manufacturing Freight outContribution margin 1Media Sales promotionContribution margin 2Marke

21、ting and salesContribution margin 3Top managementBusiness administrationInformation systemHuman resourcesSupply chainProductionExternal logistics for external goodsMark up Manufacture expenditureOther fixed costsContribution margin 4Structural costsTotal depreciationOperating profitSpecial orders no

22、t related with fixed manufacturing Corporate level operating costs are irrelevantAccountNet salesVariable manufacturing costFreight outContribution margin 1Media Sales promotionContribution margin 2Marketing and salesContribution margin 3ProductionExternal logistics for external goodsMark up Manufac

23、ture expenditureOther fixed costsContribution margin 4Structural costsSales-variable costs=Real Contribution Margin Fixed operating+Fixed manufacturingSegment Operating ProfitAccountNet Sales-Variable manufacturing-Freight outContribution Margin 1-Media -Sales promotionContribution Margin 2-Sales an

24、d marketing-Fixed manufacturingOperating ProfitAdd back: Variable manufacturing Fixed manufacturingControllable ProfitWhich indicator is better？Where does agency costs come from?3RewardsFinancialNon-financialPerformance PayTrainingBonusesEmpowermentSalary RaiseStar WorkerPaid LeaveTeam TravelParking

25、 SpotThank You NotePromotionInviting SpouseProduct CostingWhat Weve Done Before:What Weve Done Before:Remove irrelevant costReallocate misplaced costModify cost driverSpecial OrderConsider multiaspect factorsChange the contribution marginDesign the strategic development planPerformance EvaluationDefine the responsibility of SMU2Introduce two new perspectives of evaluationApply controllable profit Eliminate Agency CostSmall is the gate and narrow the road that leads to extraordinary, and only a few find itWay to be Better FoodThanks for Your AttentionQ & A