MANAGEMENT ACCOUNTING

Tutor: Nguyen truong Son

PHN LO I CHI PH
CHI PH NVL TR C TI P CHI PH S N XU T CHI PH NHN CNG TR C TI P

T NG CHI PH CHI PH QU N L DOANH NGHI P CHI PH BN HNG CHI PH TI CHNH

CHI PH S N XU T GIN TI P

Quan h gi a chi ph s n xu t v s n ph m
Chi ph nguyn v t li u tr c ti p Chi ph nguyn v t li u Chi ph nguyn v t li u gin ti p Chi ph s n xu t chung Chi ph khc pht sinh t i phn x ng Tnh th ng

Phn b S n ph m

Chi ph nhn cng gin ti p Chi ph nhn cng Chi ph nhn cng tr c ti p Tnh th ng

Direct materials purchased Chi ph v t li u mua Beginning Direct material inventory V t li u chnh t n kho u k Chi ph v t li u chnh Direct materials used Chi ph lao ng chnh Direct manufacturing labor Chi ph s n xu t chung Indirect manufacturing costs Beginning working in process S n ph m d dang u k

Cost of goods manufactured Gi thnh s n xu t

Ending Direct material inventory V t li u chnh t n kho cu i k

Ending working in progress S n ph m d dang cu i k Income Statement Bo co thu nh p

Cost of goods manufactured Thnh ph m s n xu t trong k Beginning finished goods inventory Thnh ph m t n kho u k Gi v n hng bn Costs of goods sold

Ending finished goods inventory Thnh ph m t n kho cu i k

BO CO LI L
nh d ng c a bo co thu nh p ph thu c vo ho t ng kinh doanh c a doanh nghi p.

COST OF GOODS MANUFACTURED Direct material costs Direct labor costs Indirect manufacturing costs

Work in process Manufacture finished Cost of good available for sales Finished goods Goods sold Revenues Cost of goods sold Gross margin Period cost Finished goods inventory Net profit Selling costs Adninistrative costs

COSTS INCURRED IN FOXWOOD COMPANY FOR THE YEAR ENDED DECEMBER 31, 2010
No. Description
1 Sandpaper 2 Materials-handling costs 3 Lubricants and coolants 4 Miscellaneous indirect manufacturing labor 5 Direct manufacturing labor 6 Direct materials inventory Jan. 1, 2010 7 Direct materials inventory Dec. 31, 2010 8 Finished goods inventory Jan. 1, 2010 9 Finished goods inventory Dec. 31, 2010 10 Work-in-process inventory Jan. 1, 2010 11 Work-in-process inventory Dec. 31, 2010 12 Plant-leasing costs 13 Depreciationplant equipment 14 Property taxes on plant equipment 15 Fire insurance on plant equipment 16 Direct materials purchased 17 Revenues 18 Marketing promotions 19 Marketing salaries 20 Distribution costs 21 Customer-service costs

$ 2,000 70,000 5,000 40,000 300,000 40,000 50,000 100,000 150,000 10,000 14,000 54,000 36,000 4,000 3,000 460,000 1,360,000 60,000 100,000 70,000 100,000

FOXWOOD COMAPANY SCHEDULE OF COST OF GOOD SOLD REQUIRED MANUFACTURED FOR THE YEAR ENDED DECEMBER 31, 2010

* Direct material Beginning Direct materials inventory Jan. 1, 2010 Direct materials purchased Cost of materials available for use Less: Ending Direct materials inventory Dec. 31, 2010 Direct materials used (V) * Direct labour Direct manufacturing labor (V) * Indirect manufacturing cost Sandpaper (V) Materials-handling costs (V) Lubricants and coolants (V) Miscellaneous indirect manufacturing labor (V) Plant-leasing costs (F) Depreciationplant equipment (F) Property taxes on plant equipment (F) Fire insurance on plant equipment (F) Production overhead * Manufacturing costs incurred during 2011 Beginning Work-in-process inventory Jan. 1, 2010 Total manufacturing cost to account for Less:Ending Work-in-process inventory Dec. 31, 2010 Cost of goods manufactured (to income statement)

40,000 460,000 500,000 50,000 450,000 300,000 2,000 70,000 5,000 40,000 54,000 36,000 4,000 3,000 214,000 964,000 10,000 974,000 14,000 960,000

FOXWOOD COMAPANY PROFIT AND LOST STATEMENT FOR THE YEAR ENDED DECEMBER 31, 2010

Revenues *Cost of good sold Beginning Finished goods inventory Jan. 1, 2010 Finished goods manufactured Cost of goods for sales Less: Ending Finished goods inventory Dec. 31, 2010 Cost of good sold Gross Profit (Gross margin) * Operating costs (Administration & Sales costs) Marketing promotions Marketing salaries Distribution costs Customer-service costs Operating costs Net profit (operating income)

1,360,000

100,000 960,000 1,060,000 150,000 910,000 450,000 60,000 100,000 70,000 100,000 330,000 120,000

EXPLAINATION

EXPLAINATION

MAGINAL COSTING & ABSORPTION COSTING

Q Selling Q product

TOTAL QUALITY MANAGEMENT

Foxwood Co. makes and sales a single product; the unit specifications are as follows: Direct materials A: 8 m2/unit & $40/m2 Machine time : 0.6 hrs/unit Machine cost per hours : $400 Selling price : $1,000 1. Material crapped 5% -> 3% 2. Material wasted when input to machine 4% -> 2.5% 3. Inspection and storage material $1/m2 4. Inspection equipment $250,000/period 5. Down graded product 12.5% ->7.5% 5. Down graded product sold at a discount 30% 6. Production returned from customer 5% -> 2.5% of units delivered 7. Product liability 3% -> 1% of sales revenue 8. Machine idle 20% -> 12.5% 9. Admin, selling & distribution $600,000 -> $540,000 (10%) 10. Prevention program $200,000 -> $600,000 11. Machine Run Time 0.6 hrs -> 0.5 hrs

Scrapped mat. due to poor quality (1.) Material A 52,632 m2 (5/95:3/97)

Processing loss (2.) Material A 48,000 m2

Material A 50,000 m2 (4/96:2.5/97.5)

Down graded: Final inspection (5.) Product 6,000 pcs (12.5/87.5:7.5/92.5)

Return from Customers (6.) Product 5,000 pcs

Product 5,250 pcs (5/100:2.5/100)

Machine Idle time (8.) Machine hours (including idle Time) 4,500 hrs. (20/80:12.5/87.5) Machine hours 3,600 hrs 0.6hrs:0.5hrs

(i)

Statement showing total units before inspection, before and after introduction of TQM Particulars Total sales requirement Specification failure 5%, 2.5% Down grading at inspection (12.5/87.5) x 5,250 Down grading at inspection (7.5/92.5) x 5,125 Total units before inspection Purchase of material (sq. mtr) Material required to meet pre-inspection Production requirement 6000 units x 8 sq. Mtr : 5541 x 8 sq. Mtr Processing loss (after input to machine) (4/96) x 48,000 : 2.5/97.5 x 44,324 Scrapped material due to poor quality (5/95) x 50,000 : (3/97) x 45,465 Existing (units) 5,000 250 5,250 750 6,000 After TQM program (units) 5,000 125 5,125 416 5,541

(6. ) (5. ) (5. )

(ii)

Sq. Mtr (m2) 48,000 2,000 50,000 2,632 52,632

Sq. Mtr (m2) 44,328 1,137 45,465 1,406 46,871

(2. )

(1.)

(iii)

Gross Machine Hours Existing (hrs) After TQM program (hrs) 3,600 900 4,500 2,771 396 3,167

(11.) Initial requirement 6000 units x 0.6 hrs : 5,5541units x 0.5 hrs (8.) Idle time (20:80) x 3,600 : (12.5/87.5) x 2,771

(b) Profit and Loss Account (before and after the implementation of TQM) Before TQM program 5,000,000 525,000 5,525,000 291,200 5,291,200 After TQM program 5,000,000

(5.)

Sales revenue (5,000 units x 1,000) Sales down graded 750 * 1,000 * (1-30%*) 416 * 1,000 * (1-30%*) Total sales revenue Less: Cost Material: 52,632 x $40: 46,871 x $40 Inspection : 52,632 x $1: 46,871 x $1 Machine costs 4,500 hrs x $400 3,167 hrs x $400 Inspection and other cost Fixed $ 250,000 (given) 60% of $250,000 Product liability and other claims $5,000,000 * 3% $5,000,000 * 1% Adm. Selling and Distribution $600,000 (given): $600,000 x 0.90 Preventive Programme $200,000 (given) : $600,000 (given) Total cost Profit * Discount 30%

(3.) (8.)

2,105,280 52,632 1,800,000

1,874,840 46,871

1,266,800 250,000 150,000 150,000 50,000 600,000 200,000 5,157,912 367,088 540,000 600,000 4,528,511 762,689

(4.)

(7.)

(9.)

(10.)

ABSORPTION COSTING METHOD June

640 512.2 486.2 476 472.2 435.2 408.2 350 308 56 252 255 224.4 183.6 252 183.6 30.6 40.8 91.8 26 14 64 40.8 27 42 126 127.8 550 73.8 476.2 450.2 436.2 55 381.2 374 346.8 7.2 40.8 26 14 13.6

July

12.800

14.000

10.200 11.000 11.400

MAGINAL COSTING METHOD June

640 512.2 486.2 476 472.2 435.2 408.2 350 308 56 252 255 224.4 183.6 252 183.6 64 42 26 14 99 117 550 81. 476.2 450.2 436.2 381.2 374 346.8 55 30.6 40.8 26 14

July

99

12.800

14.000

10.200 11.000 11.400

252

252

Direct material 56 Direct wages 42 Variable production overhead 126 Fixed production cost (40.8) Closing stock (27) Under/over absorbed overhead Variable selling expense 64 14 Fixed selling expense 640 26 Fixed administration expense Sales revenue

308

350

408.2

435.2

512.2 486.2 476 472.2

640

June ABSORPTION COSTING METHOD

Profit

183.6 183.6

Direct material 40.8 Direct wages 30.6 Variable production overhead 91.8 Fixed production cost 40.8 Opening stock (13.6) Closing stock (27) (7.2) Under/over absorbed overhead Variable selling expense 55 14 Fixed selling expense 26 Fixed administration expense 640 Sales revenue

224.4

255

381.2 374 346.8

476.2 450.2 436.2

550

July

Profit