1、成本与管理会计亨格瑞第成本与管理会计亨格瑞第13版英文版版英文版CA072Controlling CostsMeasure ActualCOMPAREActual Vs StandardPredetermined or Set StandardVariance12/22/20223Basic ConceptsuVariance difference between an actual and an expected(budgeted)amountuPurpose of varianceManagement by exceptionPerformance evaluationMotivate m
2、anagersPrompt strategy change12/22/20224Basic ConceptsuManagement by Exception the practice of focusing attention on areas not operating as expected(budgeted)12/22/20225Management by ExceptionDirectMaterialManagers focus on quantities and coststhat exceed standards,a practice known as management by
3、exception.Type of Product CostAmountDirectLaborStandard12/22/20226Static and Flexible BudgetsuStatic budgetPrepared for only one level of activity.It is based on the level of output planned at the start of the budget period.The master budget is an example of a static budget.uFlexible budgetDeveloped
4、 using budgeted revenues or cost amounts based on the level of output actually achieved in the budget period.uKey difference is the use of the actual output level in the flexible budget.12/22/2022712/22/2022812/22/20229Static BudgetuAssume that Webb manufactures and sells jackets.uBudgeted variable
5、costs per jacket are as follows:Direct materials cost$60 Direct manufacturing labour 16 Variable manufacturing overhead 12 Total variable costs$8812/22/202210Static BudgetuBudgeted selling price is$120 per jacket.uFixed manufacturing costs are expected to be$276,000 within a relevant range between 0
6、 and 12,000 suits.uVariable and fixed period costs are ignored in this example.uThe static budget for April 2008 is based on selling 12,000 suits.uWhat is the static-budget operating profit?12/22/202211Static BudgetuRevenues(12,000$120)$1,440,000 u Less Expenses:uVariable(12,000$88)1,056,000 uFixed
7、276,000 uBudgeted operating profit$108,000uAssume that Webb produced and sold 10,000 suits at$125 each with actual variable costs of$95.01 per suit and fixed manufacturing costs of$285,000.12/22/202212Static BudgetuWhat was the actual operating profit?uRevenues(10,000$125)$1,250,000 uLess Expenses:u
8、Variable(10,000$95.01)950,100 uFixed 285,000 uActual operating profit$14,900uWhat is the static-budget variance of operating profit?12/22/20221312/22/202214Static-Budget VarianceuA static-budget variance is:(Actual result-Budgeted amount in the static budget).uA favourable(F)variance is a variance t
9、hat increases operating profit relative to the budgeted amount.uAn unfavourable(U)variance is a variance that decreases operating profit relative to the budgeted amount.12/22/202215Static-Budget VarianceuLevel 0 analysis compares actual operating profit with budgeted operating profit.uThis is the hi
10、ghest level of analysis,a super-macro view of operating results.uThe Level 0 analysis is nothing more than the difference between actual and static-budget operating incomeAnswers:“How much were we off?”uActual operating profit$14,900 uBudgeted operating profit 108,000 uStatic-budget variance of oper
11、ating profit$93,100 U12/22/202216Static-Budget VarianceuLevel 1 analysis provides more detailed information on the operating profit static-budget variance.uLevel 1 gives the user a little more information:it shows which line-items led to the total Level 0 variance.Level 1 answers the question:“Where
12、 were we off?”12/22/20221712/22/202218Hmm!Comparingstatic budgetswith actual costsis like comparingapples and oranges.12/22/202219Reasons for varianceuInaccurate forecasting of output units sold OruWebbs performance in manufacturing and selling 10 000 jackets12/22/202220Flexible BudgetsuDeveloped us
13、ing budgeted revenues or cost amounts based on the actual output in the budget period.uPrepared at the end of the period,once actual costs are knownu3 step process12/22/20222112/22/202222Steps in Developing Flexible BudgetsuDetermine budgeted selling price,budgeted variable cost per unit and budgete
14、d fixed cost.uThe budgeted selling price is$120,the budgeted variable cost is$88 per suit,and the budgeted fixed cost is$276,000.12/22/202223Steps in Developing Flexible BudgetsuStep 1:Determine the actual output.uIn April 2008,10,000 suits were produced and sold.uStep 2:Determine the flexible budge
15、t for revenues based on budgeted selling price and actual output.$120 10,000=$1,200,00012/22/202224Steps in Developing Flexible BudgetsuStep 3:Determine the flexible budget for costs based on budgeted variable costs per output unit,actual output and the budgeted fixed costs.uFlexible budget:uVariabl
16、e costs(10,000$88)$880,000 uFixed costs 276,000 uTotal costs$1,156,00012/22/202225VariancesuLevel 2 analysis provides information on the two components of the static-budget variance.1Flexible-budget variance2Sales-volume variance12/22/202226Level 2 Analysis,Illustrated12/22/202227Level 2 Analysis,Il
17、lustrated12/22/202228Sales-Volume VarianceuThe sales-volume variance is the difference between the static budget for the number of units expected to be sold and the flexible budget for the number of units that were actually sold.uThe only difference between the static budget and the flexible budget
18、is the output level upon which the budget is based.12/22/202229Sales-Volume VarianceSales-Volume Variance (Level 2)in(000)Flexible Static Sales-Volume Budget Budget Varianceunits 10 12 2 URevenue$1,200$1,440$240 UVariable costs 880 1,056 176 FContr.margin$320$384$64 UFixed costs 276 276 0Operating p
19、rofit$44$108$64 U12/22/202230Sales-Volume VarianceuActual quantity sold:10,000 suits12/22/202231Sales-Volume VarianceuWhy is the sales-budget variance$64,000 unfavourable?uStatic budget units 12,000 Actual units sold 10,000 Variance 2,000 UuBudgeted contribution margin per unit:($120$88)=$32u2,000$3
20、2=$64,000 unfavourable variance12/22/202232Level 2 Analysis,Illustrated12/22/202233Flexible-Budget VarianceFlexible-Budget Variance(Level 2)in(000)Flexible Actual Budget Results VarianceUnits 10 10 0 URevenue$1,200$1,250$50 FVariable costs 880 950.1 70.1 UContribution margin$320$299.9$20.1 UFixed co
21、sts 276 285 9 UOperating profit$44$14.9$29.1U12/22/202234Flexible-Budget VarianceuActual quantity sold:10,000 suits12/22/202235Flexible-Budget VarianceuThe flexible-budget variance arises because the actual selling price,variable costs per unit,quantities and fixed costs differ from the budgeted amo
22、unt.u Actual Budgeted Amount Amount Selling Price$125$120 Variable cost$95.01$8812/22/202236Flexible-Budget VarianceuThe flexible-budget variance pertaining to revenues is often called a selling-price variance because it arises solely from differences between the actual selling price and the budgete
23、d selling price:uSelling-price variance=($125$120)10,000=$50,000 FuActual selling price exceeds the budgeted amount by$5.12/22/202237Flexible-Budget VarianceuWhy is the flexible-budget variance$29,100 unfavourable?uSelling-price variance$50,000 F Actual variable costs exceeded flexible budget variab
24、le cost 70,100 U Actual fixed costs exceeded flexible budget fixed costs 9,000 U Total flexible-budget variance$29,100 U12/22/202238Budget Variances Level 1Level 212/22/202239Level 3 VariancesuAll Product Costs can have Level 3 Variances.Direct Materials and Direct Labor will be handled next.Overhea
25、d Variances are discussed in detail in a later chapteruBoth Direct Materials and Direct Labor have both Price and Efficiency Variances,and their formulae are the same12/22/202240Variance Summary12/22/202241Cost Variance AnalysisStandard Cost VariancesQuantity VariancePrice VarianceThe difference bet
26、weenthe actual price and thestandard priceThe difference betweenthe actual quantity andthe standard quantity12/22/202242A General Model for Variance Analysis Actual Quantity Actual Quantity Budgeted Quantity Actual Price Budgeted Price Budgeted PricePrice VarianceQuantity VarianceStandard price is t
27、he amount that should have been paid for the resources acquired.12/22/202243Level 3 VariancesuPrice Variance formula:uEfficiency Variance formula:12/22/202244Level 3 Analysis,Illustrated12/22/202245Price and Efficiency VariancesuLevel 3 analysis separates the flexible-budget variance into price and
28、efficiency variances.uThe following:uDirect materials purchased and used:22,200 square metresuActual price paid per metres:$2812/22/202246Price and Efficiency VariancesuActual direct manufacturing labour-hours:9,000uActual price paid per hour:$22uWhat is the actual cost of direct materials?22,200$28
29、=$621,600uWhat is the actual cost of direct manufacturing labour?9,000$22=$198,00012/22/202247Price VariancesuA price variance is the difference between the actual price and the budgeted price of inputs multiplied by the actual quantity of inputs.Input-price varianceRate varianceuPrice variance=(Act
30、ual price of inputs Budgeted price of inputs)Actual quantity of inputs.12/22/202248Price VariancesuWhat is the price variance for direct materials?u($28$30)22,200=$44,400 FuWhat is the price variance for direct manufacturing labour?u($22$20)9,000=$18,000 U12/22/202249Price Variances Actual Quantity
31、Actual Quantity of Inputs at of Inputs at Actual Price Budgeted Price 22,200$28 22,200$30 =$621,600 =$666,000$44,400 F Materials price variance12/22/202250Price Variances Actual Quantity Actual Quantity of Inputs at of Inputs at Actual Price Budgeted Price 9,000$22 9,000$20 =$198,000 =$180,000$18,00
32、0 U Labour price variance12/22/202251Price VariancesuWhat may be some of the possible causes for WEBBs favourable direct material price variances?webbs purchasing manager negotiated more skillfully than was planned.The purchasing manager changed to a lower-price supplier.The purchasing manager order
33、ed large quantities than the quantities budgeted,thereby obtaining quantity discounts.Direct material prices decreased unexpectedly because of,say,industry oversupply.Budgeted material prices were set too high without careful analysis of the market.Low-quality material so that the price is lower.uWh
34、at may be some of the possible causes for WEBBs unfavourable direct labor price variances?Labour prices were set without careful analysis of the market.12/22/202252Efficiency VariancesuThe efficiency variance is the difference between the actual and budgeted quantity of inputs used multiplied by the
35、 budgeted price of input.uEfficiency variance=(Actual quantity of inputs used Budgeted quantity of inputs allowed for actual output)Budgeted price of inputs.12/22/202253Efficiency VariancesuWhat is the efficiency variance for direct materials?u(22,200 20,000)$30=$66,000 UuWhat is the efficiency vari
36、ance for direct manufacturing labour?u(9,000 8,000)$20.00=$20,000 U12/22/2022Efficiency Variances Actual Quantity Budgeted Quantity of Inputs at Allowed for Actual Budgeted Price Outputs at Budgeted Price 22,200$30 10,000 2$30 =$660,000 =$600,000$66,000 U Materials efficiency variance12/22/2022Effic
37、iency Variances Actual Quantity Budgeted Quantity of Inputs at Allowed for Actual Budgeted Price Outputs at Budgeted Price 9,000$20.00 10,000 0.8$20.00 =$180,000 =$160,000$20,000 U Labour efficiency variance12/22/202256Efficiency VariancesuWhat may be some of the causes for Webbs unfavourable effici
38、ency variances?Webbs purchasing manager received lower quality of materials.Webbs production scheduler inefficiently scheduled work.The personnel manager hired under-skilled workers.The maintenance department did not properly maintain machines.Budgeted time standards were set too tight without caref
39、ul analysis of the operating conditions and the employees skills.12/22/202257Price and Efficiency VariancesuWhat is the flexible-budget variance for direct materials?uMaterials-price variance$44,400 F+Materials-efficiency variance$66,000 U=$21,600UuWhat is the flexible-budget variance for direct man
40、ufacturing labour?uLabour-price variance$18,000 U+Labour-efficiency variance$20,000 U=$38,000 U12/22/202258Variance Summary12/22/20225912/22/202260Webb sold 2000 fewer than budgetedWebb sold units at a higher price than budgeted.Poor quality of clothPoor maintenance of machinesUnderskilled workers12
41、/22/202261Standard CostinguTrace direct costs to output produced by multiplying the standard prices or rates by the standard quantities of inputs allowed for actual outputs produceduAllocates overhead costs on the basis of the standard overhead-cost rates times the standard quantities of the allocat
42、ion bases allowed for actual outputs produced12/22/202262Standard Costing12/22/202263Standard CostinguBudgeted amounts and rates are actually booked into the accounting systemuThese budgeted amounts contrast with actual activity and give rise to Variance Accounts.12/22/202264u1a Direct material cont
43、rol (22 200$30)666 000 Direct material price variance (22 200$2)44 400 Accounts payable control (22 200$28)621 600u1b Work in process control (10 0002$30)600 000 Direct material efficiency variance (22 200$30)66 000 Direct material control (22 200$30)666 00012/22/202265u2 Work in process control (10
44、 0000.8$20)160 000 Direct manufacturing labor price variance (9 000$2)18 000 Direct manufacturing labor efficiency variance (1 000$20)20 000 Wages payable control (9 000$22)198 00012/22/202266uCost of goods sold 59 600 Direct material price variance (22 200$2)44 400 Direct material efficiency varian
45、ce (22 200$30)66 000 Direct manufacturing labor price variance (9 000$2)18 000 Direct manufacturing labor efficiency variance (1 000$20)20 00012/22/202267Multiple Causes of VariancesuOften the causes of variances are interrelated.uA favourable price variance might be due to lower quality materials.u
46、It is best to always consider possible interdependencies among variances and to not interpret variances in isolation of each other.12/22/202268When to Investigate VariancesuFrequently,managers base their answer on subjective judgements.uFor critical items,a small variable may prompt follow-up.uFor o
47、ther items,a minimum monetary variance or a certain percentage of variance from budget may prompt an investigation.12/22/202269Management Uses of VariancesuTo understand underlying causes of variances.uRecognition of inter-relatedness of variancesuPerformance MeasurementManagers ability to be Effect
48、iveManagers ability to be Efficient12/22/202270Effectiveness and EfficiencyAnoperation is effective ifit has attainedor exceededits goals.Bottom line:Managers should not automaticallyInterpret a favorable variance as“good news”.Anoperation is efficient if ithas not wastedresources.12/22/202271Activi
49、ty-Based Costing and VariancesuABC easily lends its to budgeting and variance analysis.uBudgeting is not conducted on the departmental-wide basis(or other macro approaches)uInstead,budgets are built from the bottom-up with activities serving as the building blocks of the process12/22/202272Benchmark
50、ing and VariancesuBenchmarking is the continuous process of comparing the levels of performance in producing products&services against the best levels of performance in competing companiesuVariances can be extended to include comparison to other entities12/22/202273Benchmarking Example:Airlines12/22
