1、 Towards Business Awareness Agenda Prepared by : Polly Yang 2019/02/18 Section one: Molex Income Statement Section two: Contents of Molex Income statement Cost of Sales Scrap/Yield LossMaterialCycle Count(Gain)/LossMaterial Consumption(M&P)Purchase PriceVariance(PPV)Slow & ExcessOthers Contents of M
2、olex income statement Cost of Sales - Inward Freight Import duty for Dom salesFreight & DutyCustom fee(in & out) Contents of Molex income statement Cost of Sales External manufacturingProduction order toSub-contractorOperator borrow fromSub-contractorContents of Molex income statement Cost of Sales
3、Direct LaborWages(Operators, leaders,Setup men,Packers)OvertimeShift Premium/AllowancesBenefit(e g: stock option, insurance, medicaletc)Cost center : 1701-1xxxContents of Molex income statement Cost of Sales Variable Overhead(VOH)Indirect People exp(Inspector,material handlerWH assistants, WH coordi
4、nators)Power/WaterExpensesSmall equipment/Machine repairs&Maint. ExpensesProduction/Shipping Supplies etc.Cost center :1701-1xxx,1701-300 x,1701-350 x,Contents of Molex income statement Cost of Sales Period Manufacturing(PM/FOH)Office/DP SuppliesRental/Communication/Traveling/Entertainmentetc.Insura
5、nceVehicle ExpensesRecruitmentMgmt/Sup people exp(Technicians,engineers,managers,Supervisors & all other employees not Mentioned in DL/VOH for the following CC)Depn/Bldg maintPeople cost onlyCost center:1701-1xxxAll expenses Cost center : 1701-3xxxContents of Molex income statement -Selling and Gene
6、ral Administration exp.Variable SellingCommissionExpensesFreight paid on partsShipped to customersNon cost center exp, but allocate to business unitContents of Molex income statement -Selling and General Administration exp.Selling& AdvertisingSupply repairPeople expenseBldg maint./DepnInsuranceEnter
7、tainment,Travel expense,sampleVehicles expAdvertisingCost center :1701-4xxx,1701-5xxxInclude general sales, sales office,marketingO/S ServicesContents of Molex income statement -Selling and General Administration exp.General AdministrationSupply repairPeople expenseBldg maint./DepnPower/waterInsuran
8、ceEntertainment,Travel expense,Vehicles expCost center :1701-7xxx, include general office, finance, HR, MISO/S ServicesContents of Molex income statement -Selling and General Administration exp.Research & Development (R&D)Supply repairPeople expenseBldg maintenancedepreciationInsuranceEntertainment,
9、Travel expense,Vehicles expCost center :1701-6xxxO/S ServicesContents of Molex income statement -Selling and General Administration exp.Contents of Molex income statement Chart of Accounts mapping to Income StatementSection three : Molex Accounting Terms & DefinitionsMolex Accounting Terms & Definit
10、ionsMolex Accounting Terms & DefinitionsMolex Accounting Terms & Definitions- Case studyCurrent income statement :Now, if there is a new order with revenue $500, but at a high mfg cost, say 80% matl cost, 3% D/L, 3% VOH. Should we accept this business ? Will it bring benefit to us ? (assume no new i
11、nvestment are needed).If the matl cost is 90%, 3% D/L, 3% VOH. What will happen ?If the matl cost is 90%, 5% D/L, 5% VOH. How will you make the decision?Molex Accounting Terms & Definitions- Case study1. 80% material cost, 3% D/L, 3% VOH :As no new investment are needed, so no increase in PM & depn,
12、 thoughGP% decrease, but it can bring more $70 GP.Molex Accounting Terms & Definitions- Case study2. 90% material cost, 3% D/L, 3% VOH :GP amount increase, the business still can be considered.Molex Accounting Terms & Definitions- Case study3. 90% material cost, 5% D/L, 5% VOH :No increase in GP, if
13、 no other special reason, no need to consider.Molex Accounting Terms & DefinitionsGP or GM : Gross profit or Gross margin = Sales revenue cost of goods soldGP% : GP/ Sales revenuePretax : profit before tax = Sales revenue cost of goods sold SG&A = GP SG&APretax % : Pretax/Sales revenueMolex Accounti
14、ng Terms & DefinitionsLGM : Landed gross margin = Ending selling price - mfg cost - interco freight and duty - 1.7% Global VOH at end selling priceFor example: DG sold 887123400 to Mx Inc at $1000, and MX Inc sold it to IBM at $1500. Mx Inc frt & duty is 2%,DG mfg cost is $800.So, LGM for the part i
15、s :1500-800-1000*2%-1500*1.7%=654.50LGM%=654.50/1500=43.63%Molex Accounting Terms & Definitions - LGM & GP & PretaxHK/DG Domestic Interco Quotation QuotationLGM %454540403535252515154545353525252323Combined Pretax %35353030242412120 0222211112 20 0Combined GP %454540403535252515153434252516161515* L
16、GM 45% approval by SE* LGM 35% - 45% approval by Sales Mgr* LGM 25% - 35% approval by Business Unit Mgr * LGM 25% approval by GMMolex Accounting Terms & DefinitionsDL productivity : Net Revenue Material cost Direct labor + Ext MfgPeople productivity : Net Revenue Material cost Total people cost*+ Ex
17、t Mfg*People cost consisting of salaries, wages, allowance, addl mth salary, bonus, benefits; training, seminar, and other miscellaneous.Section four : Product costingBOMUsage of materialPdt Development/OperationsIERoutingOutput, efficiencyPdt DevelopmentOperationsIEProduct costPurchase price for Ma
18、terialPurchasingActivity price Dollar per hour atMachine and laborVOH/PM=Expense/output hourMachine depn=Depn/Available hourFinance Product costingIn SAP, there are two type of product cost : CVST : Std.cost, update on May and Nov every year. CVCC: Current cost, base on the latest purchase price and
19、 BOM/Routing. Monthly update.Section five : - COPA and LGM reportCOPA report : Cost of profitability analysis report Base on our selling price and product cost (CVST or CVCC). LGM report : Land gross margin report Base on end selling entities selling price and mfg entities cost. Towards Business Awareness Q & A Towards Business Awareness ENDTHANK YOU !
