mahm8e chapter05.ab.az

8/16/2019 MAHM8e Chapter05.Ab.az

1/27

PowerPointPowerPoint Presentation byPresentation by

Gail B. WrightGail B. WrightProfessor Emeritus of AccountingProfessor Emeritus of Accounting

Bryant UniversityBryant University

© Copyright !!" #homson $outh%Western& a part of #he

#homson Corporation. #homson& the $tar 'ogo& an(

$outh%Western are tra(emar)s use( herein un(er license.

MANAGEMENT

ACCOUNTING

8th EDITION

BY

HANSEN & MOWEN

* AC#+,+#-%BA$E /A0AGE/E0#

STUDENT EDITION


2/27

1. Describe activity-based management &explain its relationship to activity-based

costing.2. Explain process value analysis.

3. Describe activity performance

measurement.4. Describe activity-based customer &

supplier costing

LEARNING OBJECTIVES


3/27

AC#+,+#-%BA$E

/A0AGE/E0#1 efinition

system!ide" integrated

approach that focusesmanagement#s attention on

activities for improving customer

value and profit.

$% 1


4/27

%+/E0$+20A' AB/ /2E'

E34+B+#E34+B+# *%5*%5

$% 1

2-dimensional

model sho!s

intersection of cost

& process.


5/27

AB/ +/P'E/E0#A#+20 /2E'

E 3 4 + B

+ #

E 3 4 + B

+ # * %

* %

$% 1


6/27

$-$#E/$ P'A00+0G

ddresses these issues

urpose" ob'ectives of () system

%rgani*ations current & desired competitive

position

%rgani*ation#s business processes & product mix

+imeline" assigned responsibilities" resources

re,uired for implementationbility of organi*ation to implement" learn" use

ne! information

$% 1


7/27

AB/ 6 7E$P20$+B+'+#-

ACC2U0#+0Gesponsibility accounting is fundamental tool

of managerial accounting control

lso related to process value analysis /0ssigning responsibility

Establishing performance measures" benchmars

Evaluating performance

ssigning re!ards

$% 1


8/27

8+0A0C+A'%BA$E $-$#E/$

ssign responsibilities" measures performance

in financial terms

re useful in environments !ith slo! or littlechange

oncrete pipes" blocs

re !ell-defined or relatively stable

environments

$% 1

financial terms


9/27

AC#+,+#-%BA$E $-$#E/$

Developed for firms in continuous

improvement environment

ssign responsibilities to processesse both financial & nonfinancial measures of

performance

re useful in environment that experiencerapid change

omputer technology

$% 1

rapid change


10/27

7+,E7 A0A'-$+$1 efinition

nderstanding !hat causes

activity costs by understandingactivity inputs & outputs most

basic causes for an activity being

performed.

$% 2

722# CAU$E$1 efinition


11/27

5hat are 6value-added7activities8

/alue-added activities are

activities that are necessary to

remain in business.

$% 2

necessary to

remain in business


12/27

,A'UE%AE AC#+,+#+E$

re

)andatory to comply !ith la!s

Discretionary

roduces a change of state

9ot achievable by preceding activities

Enables other activities to be performed

erformed at a value-added cost to achieve

perfect efficiency

Eliminate !aste & reduce costs

$% 2


13/27

020%,A'UE%AE AC#+,+#+E$

re unnecessary

:ail to satisfy 3 defining conditions of

value-added activities

;ncur non-value-added costs of

inefficiency

$% 2


14/27

9A+:E0 C2$#+0G1 efinition

+he effort to reduce costs ofexisting products & processes.

$% 2

existing products & processes


15/27

7EUC+0G C2$#$

ctivity elimination

:ocusing on non-value-added activities

ctivity selectionhoosing among different sets of activities

ctivity reduction

educing time" resources re,uiredctivity sharing

sing economies of scale

$% 2


16/27

AC#+,+#- PE7827/A0CE

/EA$U7E$

Efficiency

elationship of activity inputs & outputs


17/27

8+0A0C+A' /EA$U7E$ 28

AC#+,+#- PE7827/A0CE

:or potential & actual savings

/alue- & non-value-added activity cost reports

+rends in activity cost reports

>ai*en standard setting

(enchmaring

$ife-cycle costing

$% 3

$% 3


18/27

,A'UE%AE $#A0A7

alls for elimination of non-value-added

activities

;dentifies optimal activity outputompares actual to value-added activity costs

allo!ing management to

ssess level of activity inefficiencyDetermine potential for improvement

$% 3

$% 3


19/27

C2$# 7EP27#1 $tep 5

Activity Activity Driver SQ* AQ* S*

5elding 5elding hours 1?"??? 12"??? @4?

e!or e!or hours ? 1?"??? A

=etups =etup hours ? B"??? B?

;nspection C ;nspections ? 4"??? 1

$% 3

$% 3


20/27

C2$# 7EP27#1 $tep

Activity

!"#ue$

A%%e% C't'

Nn$!"#ue$A%%e% C't'

Actu"#C't'

5elding @4??"??? @?"??? @4?"???

e!or ? A?"??? A?"???

=etups ? 3B?"??? 3B?"???

;nspection ? B?"??? B?"???

+otal @ 4??"??? @ A?"??? @ AA?"???

$% 3

E34+B+#E34+B+# *%;*%;

$% 3


21/27

#7E0 7EP27#+0G

llo!s management to follo! up on

actions taen to reduce costs byexamining !hether outcomes !ere

as expected.

llo!s management to follo! up on

actions taen to reduce costs by

examining !hether outcomes !ere

as expected.

$% 3

$% 3


22/27

#7E0 7EP27#1 $tep <

Activity

("'tYe"r

CurrentYe"r Ch"n)e

5elding @?"??? @?"??? @3?"???

e!or A?"??? F?"??? 2?"???

=etups 3B?"??? 2??"??? 1B?"???

;nspection B?"??? 3"??? 2"???

+otal @ A?"??? @ 3"??? @ 23"???

$% 3

E34+B+#E34+B+# *%5!*%5!

+rend report

sho!s

improvement that

has been made.

Nn$!"#ue$A%%e% C't'

$% 3


23/27

BE0C4/A79+0G1 efinition

$% 3

ses 6best practices7 as the

standard for evaluating activity performance !ith the goal of

becoming the best at performing

activities & processes.

$% 4


24/27

AC#+,+#-%BA$E CU$#2/E7 6

$UPP'+E7 C2$#+0G

(y applying the approach of activity- based costing to customers andsuppliers" managers can identify &reduce true cost of theserelationships.

(y applying the approach of activity- based costing to customers andsuppliers" managers can identify &reduce true cost of theserelationships.

$% 4

$% 4


25/27

AC#+,+#-%BA$E CU$#2/E7

C2$#+0G1 An E=ample

("r)eCu'ter

+, S"##erCu'ter'

%rder-filling costs @ 4"??? @ 4??"???

=ales force costs 1?"??? 21?"???

( costing sho!scomparative cost of larger &

smaller customers" assuming

same number of units sold.

$% 4

$% 4


26/27

AC#+,+#-%BA$E $UPP'+E7

C2$#+0G

;dentifies costs other than price such as


27/27

THE ENDTHE END

CHATE- .

mahm8e chapter05.ab.az

Documents