責任中心和財務管理2024/3/11責任中心和財務管理LearningObjective1 Describetheformandnatureofvarianceanalysisandapplyitsbasicinsights.責任中心和財務管理VariancesWhatarevariances?Variancesaredifferencesbetweenactualandestimatedcosts.Varianceanalysisisanecessarysteptounderstandwhyadifferenceoccurred.責任中心和財務管理First-LevelVariancesThefirst-levelvarianceforacostitemisthedifferencebetweentheactualandmasterbudgetcosts.Variancesare“favorable”iftheactualcostsarelessthanestimatedcosts.Variancesare“unfavorable”iftheactualcostsexceedsestimatedcosts.責任中心和財務管理First-LevelVariancesCanningCellularServices(000) Master Actual

Budget

Costs

DifferenceDirectMaterial–WelcomePackage 25,000 29,700 4,700DirectLabor–SalesStaff 12,500 14,850 2,350–TechnicalStaff 10,000 10,890 890SupportCost–DataProcessing 3,000 3,960 960–SystemActivation 45,000

42,900

–2,100TotalCustomer-RelatedCosts 95,500 102,300 6,800責任中心和財務管理DecomposingVariancesWhatareflexiblebudgets?Flexiblebudgetsrecastcosttargetsintheplannedormasterbudgettoreflecttheactuallevelofproduction.Thisallowscomparisonsofactualresultstotargetsbasedontheachievedlevelofproduction.責任中心和財務管理DecomposingVariancesWhatareplanningvariances?Theyreflecttheeffectofthevolumechangebetweenthemasterbudgetandactualactivitylevelachieved.Whatareflexiblebudgetvariances?Theyshowthedifferencesbetweentheflexiblebudgetandtheactualresults.責任中心和財務管理DecomposingVariances

MasterBudget–FlexibleBudget=PlanningVarianceFlexibleBudget–ActualResults=FlexibleBudgetVariancePlanningvariancesandflexiblebudgetvariancesarecalledsecondaryvariances.責任中心和財務管理DecomposingVariancesWhatisthedirectmaterialefficiencyorusagevariance?Itisactualquantityusedattargetorstandardpricelesstheflexiblebudgetallowanceattheplannedortargetprice.UsageVariance=(AQ–SQ)×SPWhatisthedirectmaterialpricevariance?PriceVariance=(AP–SP)×AQ責任中心和財務管理DecomposingVariancesWhatistheefficiencyorusagevariancefordirectlaborcosts?EfficiencyVariance=(AH–SH)×SRWhatistheratevariancefordirectlaborcosts?RateVariance=(AR–SR)×AHSupportcostscanalsobeanalyzedindetail.責任中心和財務管理DecomposingVariancesSupportcostscanreflectflexibleorcapacity-relatedcosts.Thequantityofcapacity-relatedcostsmaynotchangefromperiodtoperiod,butthespendingonthemmayfluctuate.Whatareflexiblesupportcosts?Theyreflectoperationsthatareproportionaltothevolumeofactivity.責任中心和財務管理DecomposingVariances Master Planning Flexible

Budget

Variance

BudgetDirectMaterial–WelcomePackage 25,000 2,500 27,500DirectLabor–SalesStaff 12,500 1,250 13,750–TechnicalStaff 10,000 1,000 11,000SupportCost–DataProcessing 3,000 300 3,300–SystemActivation 45,000

4,500 49,500TotalCustomer-RelatedCosts 95,500 9,550 105,050CanningCellularServices(000)責任中心和財務管理DecomposingVariances Flexible Actual

BudgetVariance

ResultsDirectMaterial–WelcomePackage 2,200 29,700DirectLabor–SalesStaff 1,100 14,850–TechnicalStaff –110 10,890SupportCost–DataProcessing 660 3,960–SystemActivation –6,600 42,900TotalCustomer-RelatedCosts –2,750 102,300CanningCellularServices(000)責任中心和財務管理DecomposingVariancesThefollowinginformationrelatestoCanningCellularService:Theactualnumberofnewcustomerswere1,100,000.DirectMaterialsSQ:1AQ:1SP:$25AP:$27DirectLaborSalesStaffSH:.50AH:.45SR:$25AR:$30責任中心和財務管理DecomposingVariancesDirectLaborTechnicalStaffSH:.25AH:.22SR:$40AR:$45SupportCostDataProcessingSH:.20AH:.24SR:$15AR:$15SupportCostSystemActivationSH:.15AH:.12SR:$300AR:$325責任中心和財務管理DecomposingVariancesMaterialsefficiencyvariance=0Materialspricevariance:($25SP–$27AP)×1,100,000=$2,200,000UFlexiblebudgetvariance=$2,200,000USalesstaffefficiencyvariance:(550,000SH–495,000AH)×$25=$1,375,000F責任中心和財務管理DecomposingVariancesSalesstaffratevariance:($25SR–$30AR)×495,000=$2,475,000UFlexiblebudgetvariance=$1,100,000UTechnicalstaffefficiencyvariance:(275,000SH–242,000AH)×$40=$1,320,000F責任中心和財務管理DecomposingVariancesTechnicalstaffratevariance:($40SR–$4AR)×242,000=$1,210,000UFlexiblebudgetvariance=$110,000F

Supportcostdataprocessingefficiency:variance(220,000SH–264,000AH)×$15=$660,000URatevariance=0Flexiblebudgetvariance=$660,000U責任中心和財務管理DecomposingVariancesSupportcostsystemactivationefficiencyvariance:(165,000SH–132,000AH)×$300=$9,900,000FSupportcostsystemactivationratevariance($300SR–$325AR)×132,000=$3,300,000UFlexiblebudgetvariance=$6,600,000F責任中心和財務管理DecomposingVariancesMasterBudgetFlexibleBudgetActualResultsPlanningVarianceFlexibleBudgetVarianceTotalVariance責任中心和財務管理DecomposingVariancesUsageVarianceFlexibleBudgetVariance

ActualQuantity×StandardPriceStandardQuantity×StandardPriceActualQuantity×ActualPricePriceVariance責任中心和財務管理DecomposingVariancesSecondLevelVariancesPlanningvariancesFlexiblebudgetvariancesFirstLevelVariancesDifferencebetweentheactualandmasterbudgetcostsThirdLevelVariancesUseandpricevariances責任中心和財務管理LearningObjective2 Showwhyorganizationsuseresponsibilitycenters.責任中心和財務管理DecentralizationWhatarecentralizedorganizations?Organizationswhichreservemostofthedecision-makingpowerforseniorexecutives.Centralizationworkseffectivelyinorganizationswithstableenvironments.責任中心和財務管理DecentralizationWhataredecentralizedorganizations?Organizationswhichdelegateagooddealofthedecision-makingauthoritytolower-levelmanagers.Decentralizedorganizationsareeffectiveinenvironmentsrequiringquickresponsestochange.責任中心和財務管理DecentralizationThreeconditionsarenecessaryforeffectivedecentralization:Employeesmustbegiven,andaccept,theauthorityandresponsibilitytomakedecisions.責任中心和財務管理DecentralizationEmployeesmusthavethetrainingandskillstheyneedtoacceptthedecisionmakingresponsibility.Theorganizationmusthaveasysteminplacethatguidesandcoordinatestheactivitiesofdecentralizeddecisionmakers.責任中心和財務管理ControllingOperationsThemajorpurposeofdecentralizationistogivedecisionmakerstheresponsibilitytomakeoperatingdecisions.Thiscreatesaneedforoperationscontrol.Whatisthefocusofoperationscontrol?Itfocusesonfindingthebestoperatingdecisions.責任中心和財務管理ControllingOperationsWhatisthefocusoffinancialcontrol?Itfocusesonanoverallassessmentofhowwelloperationscontrolisworkingtoimprovefinancialperformance.責任中心和財務管理LearningObjective3 Recognizethecommonformsofresponsibilitycenters.責任中心和財務管理ResponsibilityCentersWhatisaresponsibilitycenter?Itisanorganizationunitforwhichamanagerismaderesponsible.Thecenter’smanagerandsupervisorestablishspecificandmeasurablegoalsfortheresponsibilitycenter.Thegoalsshouldpromotethelong-terminterestoftheorganization.責任中心和財務管理ResponsibilityCentersResponsibilitycentersareclassifiedintofourtypes:CostcentersRevenuecentersProfitcentersInvestmentcenters責任中心和財務管理ResponsibilityCentersWhatisacostcenter?Itisaresponsibilitycenterwhoseemployeescontrolcostsbutdonotcontrolitsrevenuesorinvestmentlevel.責任中心和財務管理ResponsibilityCentersWhatisarevenuecenter?Itisaresponsibilitycenterwhosememberscontrolrevenuesbutdonotcontrolthecostoftheproductorservicetheysellorthelevelofinvestmentintheresponsibilitycenter.責任中心和財務管理ResponsibilityCentersWhatisaprofitcenter?Itisaresponsibilitycenterwhosemanagerandotheremployeescontrolboththerevenuesandthecostsoftheproductorservicetheysellordeliver.責任中心和財務管理ResponsibilityCentersWhatisaninvestmentcenter?Itisaresponsibilitycenterwhosemanagerandotheremployeescontroltherevenues,costs,andthelevelofinvestmentintheresponsibilitycenter.責任中心和財務管理LearningObjective4 Identifytheissuestoconsiderandbasictoolstouseinassessingtheperformanceofaresponsibilitycenter.責任中心和財務管理EvaluatingResponsibilityCentersUnderlyingtheaccountingclassificationsofresponsibilitycentersistheconceptofcontrollability.Thecontrollabilityprincipleassertsthatpeopleshouldonlybeheldaccountableforresultsthattheycancontrol.Itisoftendifficulttoapplythecontrollabilityprinciple.責任中心和財務管理EvaluatingResponsibilityCentersWhataresomeproblemsassociatedwithcontrollability?jointlyearnedrevenuesand/orjointlyincurredcostsintricate,andoftenarbitrary,accountingprocedures責任中心和財務管理LearningObjective5 Assesstheissuesandproblemscreatedbyrevenueandcostinteractionsinevaluatingtheperformanceofanorganizationunit.責任中心和財務管理UsingSegmentMarginReportsWhatisasegmentmargin?Itisthelevelofcontrollableprofitreportedbyanorganizationalunitorproductline.責任中心和財務管理UsingSegmentMarginReportsRevenue $950,000 $1,250,000 $2,200,000VariableCosts 750,000

950,000

1,700,000ContributionMargin $200,000 $300,000 $500,000OtherCosts 75,000

60,000

135,000SegmentMargin $125,000 $240,000 $365,000AllocatedCosts 70,000

80,000

150,000Income $55,000 $160,000 $215,000UnallocatedCosts 300,000OrganizationProfit ($85,000)NewCarSalesUsedCarSalesTotal責任中心和財務管理UsingSegmentMarginReportsWhattypeofproblemcanoccurwhenorganizationsevaluateresponsibilitycentersasprofitcenters?identifyingresponsibilityforthecontrolofsalesandcosts責任中心和財務管理UsingSegmentMarginReportsOrganizationsusetwodifferentapproachestoevaluatesegmentmarginnumbers:PastperformanceIsperformancethisperiodreasonable,givenpastexperience?ComparableorganizationsHowdoesperformancecomparetosimilarorganizations?責任中心和財務管理UsingSegmentMarginReportsWhataresomelimitationsofsegmentmarginreporting?Marginscanbehighlyaggregatedsummaries.Somesegmentreportscontainarbitrary,orsoft,numbers.Revenuefiguresoftenreflectassumptionsandallocationsthatcanbemisleading.責任中心和財務管理UsingSegmentMarginReportsBecauseoftheselimitations,interpretingsegmentmarginsshouldbedonecarefully.Othercriticalsuccessfactorsshouldbeusedaswelltoassessperformance.責任中心和財務管理LearningObjective6 Identifythetransfer-pricingalternativesavailabletoorganizationsandthecriteriaforchoosingatransferpricingalternative.責任中心和財務管理TransferPricingWhatistransferpricing?Itisasetoftoolsandmethodsusedtoattributerevenuesearnedbytheorganizationtoorganizationsub-units.責任中心和財務管理TransferPricingTransferpricingcanbeveryarbitrary,especiallyifthereisahighdegreeofinteractionamongtheresponsibilitycenters.責任中心和財務管理TransferPricingInterrelationshipsBodyShopDepartmentServiceDepartmentLeasingDepartmentUsedCarDepartmentNewCarDepartmentNewCarPreparationRepairsRepairsNewCarPreparationUsedCarsUsedCarsUsedCars責任中心和財務管理ApproachestoTransferPricingTherearefourapproachestotransferpricing:Market-BasedCost-BasedNegotiatedAdministered責任中心和財務管理ApproachestoTransferPricingMarket-BasedTransferPricingIfagoodexternalmarketexistsforthetransferredproductorservice,thenmarketpricesarethemostappropriatebasisforpricing.Unfortunately,thesemarketswithwell-definedpricesseldomexist.責任中心和財務管理ApproachestoTransferPricingCost-Based

TransferPricesVariablecostplusamarkupFullcostFullcostplusamarkup責任中心和財務管理ApproachestoTransferPricingWhataresomeconcernsaboutcost-basedtransferprices?Cost-basedtransferpricesdonotprovidetheappropriateeconomicguidancewhenoperationsarecapacityconstrained.Theydonotfocusontheintentofthesystem,whichistoallowcalculationofunitincomes.責任中心和財務管理ApproachestoTransferPricingEconomistsarguethatonlymarginalcosttransferpricesareoptimal.Ifthetransferpriceishigherthanthemarginalcost…thesupplyingunitwantstosellmorethantheoptimalquantity,andthepurchasingunitwantstobuyfewerthantheoptimalquantity.責任中心和財務管理ApproachestoTransferPricingNegotiated

TransferPricesSupplyingandreceivingresponsibilitycentersnegotiateprices.Pricesreflectbothnegotiatingskillsandeconomicconsiderations.Optimaltransferpriceisthethe

netrealizablevalue

ofthelastunitsuppliedforallunitssupplied.責任中心和財務管理ApproachestoTransferPricingNegotiated

TransferPricesReflecttheaccountabilityandcontrollabilityprinciplesunderlyingresponsibilitycentersCaneasilyleadtodecisionsthatdonotprovidethegreatesteconomicbenefits責任中心和財務管理ApproachestoTransferPricingAdministered

TransferPricesPricessetbyarule,policy,oranarbitratorEasytoadministerArbitraryTendtoviolatethespiritoftheresponsibilityapproach責任中心和財務管理LearningObjective7 Usereturnoninvestmentandeconomicvalueaddedasfinancialcontroltools.責任中心和財務管理EfficiencyandProductivityElementsofROIROI=OperatingIncome÷InvestmentROI=OperatingIncome

×

SalesSalesInvestmentROI=ReturnonSales×AssetTurnover=Efficiency×Productivity責任中心和財務管理EfficiencyandProductivityElementsofROIWhatisefficiency?Itisameasureofanorganization’sabilitytocontrolcosts