成本与管理会计知识拓展供双语教学使用ppt课件

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1、Copyright 2008,The McGraw-Hill Companies,Inc.McGraw-Hill/IrwinPricing Productsand ServicesAppendix ACopyright 2008,The McGraw-Hill Companies,Inc.McGraw-Hill/IrwinA-2Learning Objective 1Copyright 2008,The McGraw-Hill Companies,Inc.McGraw-Hill/IrwinA-3The Economists Approach to PricingThe price elasti

2、city of demand measures the degree to which the unit sales of a product or service is affected by a change in price.Copyright 2008,The McGraw-Hill Companies,Inc.McGraw-Hill/IrwinA-4Price Elasticity of DemandDemand for a product is inelastic if a change in price has little effect on the number of uni

3、ts sold.Copyright 2008,The McGraw-Hill Companies,Inc.McGraw-Hill/IrwinA-5Price Elasticity of DemandDemand for a product is elastic if a change in price has a substantial effect on the number of units sold.Copyright 2008,The McGraw-Hill Companies,Inc.McGraw-Hill/IrwinA-6Price Elasticity of DemandAs a

4、 manager,you should set higher(lower)markups over cost when demand is inelastic(elastic)Copyright 2008,The McGraw-Hill Companies,Inc.McGraw-Hill/IrwinA-7Price Elasticity of Demandd =ln(1+%change in quantity sold)ln(1+%change in price)Copyright 2008,The McGraw-Hill Companies,Inc.McGraw-Hill/IrwinA-8P

5、rice Elasticity of DemandSuppose the managers of Natures Garden believe that every 10 percent increase in the selling price of its apple-almond shampoo will result in a 15 percent decrease in the number of bottles of shampoo sold.Lets calculate the price elasticity of demand.For its strawberry glyce

6、rin soap,managers of Natures Garden believe that the company will experience a 20 percent decrease in unit sales if its price is increased by 10 percent.Copyright 2008,The McGraw-Hill Companies,Inc.McGraw-Hill/IrwinA-9Price Elasticity of Demandd =ln(1+%change in quantity sold)ln(1+%change in price)d

7、 =ln(1+(-0.15)ln(1+(0.10)d =ln(0.85)ln(1.10)=-1.71Copyright 2008,The McGraw-Hill Companies,Inc.McGraw-Hill/IrwinA-10Price Elasticity of Demandd =ln(1+%change in quantity sold)ln(1+%change in price)d =ln(1+(-0.20)ln(1+(0.10)d =ln(0.80)ln(1.10)=-2.34Copyright 2008,The McGraw-Hill Companies,Inc.McGraw-

8、Hill/IrwinA-11Price Elasticity of DemandCopyright 2008,The McGraw-Hill Companies,Inc.McGraw-Hill/IrwinA-12The Profit-Maximizing Price-1Profit-maximizingmarkup onvariable cost1+d=Under certain conditions,the profit-maximizing price can be determined using the following formula:Using the markup above

9、is equivalent to setting the selling price using the following formula:Profit-maximizingpriceVariable cost per unit=1+-11+dCopyright 2008,The McGraw-Hill Companies,Inc.McGraw-Hill/IrwinA-13The Profit-Maximizing PricePrice elasticity of demand=-1.71Profit-maximizingmarkupon variable cost-1.71-1.71+1-

10、1=1.41 or 141%Copyright 2008,The McGraw-Hill Companies,Inc.McGraw-Hill/IrwinA-14The Profit-Maximizing PricePrice elasticity of demand=-2.34Profit-maximizingmarkupon variable cost-2.34-2.34+1-1=0.75 or 75%Copyright 2008,The McGraw-Hill Companies,Inc.McGraw-Hill/IrwinA-15The Profit-Maximizing PriceCop

11、yright 2008,The McGraw-Hill Companies,Inc.McGraw-Hill/IrwinA-16The Profit-Maximizing PriceThis graph depicts how the profit-maximizing markup is generally affected by how sensitive unit sales are to price.Copyright 2008,The McGraw-Hill Companies,Inc.McGraw-Hill/IrwinA-17The Profit-Maximizing PriceNa

12、tures Garden is currently selling 200,000 bars of strawberry glycerin soap per year at the price of$0.60 a bar.If the change in price has no effect on the companys fixed costs or on other products,lets determine the effect on contribution margin of increasing the price by 10 percent.Copyright 2008,T

13、he McGraw-Hill Companies,Inc.McGraw-Hill/IrwinA-18The Profit-Maximizing PriceContribution margin will increase by$1,600.Copyright 2008,The McGraw-Hill Companies,Inc.McGraw-Hill/IrwinA-19Learning Objective 2Copyright 2008,The McGraw-Hill Companies,Inc.McGraw-Hill/IrwinA-20The Absorption Costing Appro

14、achUnder the absorption approach to cost-plus pricing,the cost base is the absorption costing unit product cost rather than the variable cost.Copyright 2008,The McGraw-Hill Companies,Inc.McGraw-Hill/IrwinA-21Setting a Target Selling PriceHere is information provided by the management of Ritter Compa

15、ny.Copyright 2008,The McGraw-Hill Companies,Inc.McGraw-Hill/IrwinA-22Setting a Target Selling PriceRitter has a policy of marking up unit product costs by 50 percent.Lets calculate the target selling price.Copyright 2008,The McGraw-Hill Companies,Inc.McGraw-Hill/IrwinA-23Setting a Target Selling Pri

16、ceRitter would establish a target selling price to cover selling,general,and administrative expenses and contribute to profit$30 per unit.Copyright 2008,The McGraw-Hill Companies,Inc.McGraw-Hill/IrwinA-24Determining the Markup PercentageMarkup%on absorptioncost(Required ROI Investment)+SG&A expenses

17、Unit sales Unit product cost=The markup percentage can be based on an industry“rule of thumb,company tradition,or it can be explicitly calculated.The equation to calculate the markup percentage is:Copyright 2008,The McGraw-Hill Companies,Inc.McGraw-Hill/IrwinA-25Determining the Markup PercentageCopy

18、right 2008,The McGraw-Hill Companies,Inc.McGraw-Hill/IrwinA-26Determining the Markup PercentageMarkup%on absorptioncost(20%$100,000)+($2 10,000+$60,000)10,000$20=Markup%on absorptioncost=($20,000+$80,000)$200,000=Copyright 2008,The McGraw-Hill Companies,Inc.McGraw-Hill/IrwinA-27Problems with the Abs

19、orption Costing ApproachThe absorption costing approach assumes that customers need the forecasted unit sales and will pay whatever price the company decides to charge.This is flawed logic simply because customers have a choice.Copyright 2008,The McGraw-Hill Companies,Inc.McGraw-Hill/IrwinA-28Proble

20、ms with the Absorption Costing ApproachLets assume that Ritter sells only 7,000 units at$30 per unit,instead of the forecasted 10,000 units.Here is the income statement.Copyright 2008,The McGraw-Hill Companies,Inc.McGraw-Hill/IrwinA-29Problems with the Absorption Costing ApproachLets assume that Rit

21、ter sells only 7,000 units at$30 per unit,instead of the forecasted 10,000 units.Here is the income statement.Copyright 2008,The McGraw-Hill Companies,Inc.McGraw-Hill/IrwinA-30Learning Objective 3Copyright 2008,The McGraw-Hill Companies,Inc.McGraw-Hill/IrwinA-31Target CostingTarget costing is the pr

22、ocess of determining the maximum allowable cost for a new product and then developing a prototype that can be made for that maximum target cost figure.The equation for determining the target price is shown below:Copyright 2008,The McGraw-Hill Companies,Inc.McGraw-Hill/IrwinA-32Reasons for Using Targ

23、et CostingTwo characteristics of prices and product costs:The market(i.e.,supply and demand)determines price.Most of the cost of a product is determined in the design stage.Copyright 2008,The McGraw-Hill Companies,Inc.McGraw-Hill/IrwinA-33Reasons for Using Target Costing Target costing was developed

24、 in recognition of the two characteristics shown on the previous screen.More specifically,Target costing begins the product development process by recognizing and responding to existing market prices.Copyright 2008,The McGraw-Hill Companies,Inc.McGraw-Hill/IrwinA-34Reasons for Using Target CostingTa

25、rget costing focuses a companys cost reduction efforts in the product design stage of production.Copyright 2008,The McGraw-Hill Companies,Inc.McGraw-Hill/IrwinA-35Target CostingCopyright 2008,The McGraw-Hill Companies,Inc.McGraw-Hill/IrwinA-36Target CostingEach functional area within Handy Appliance

26、 would be responsible for keeping its actual costs within the target established for that area.Copyright 2008,The McGraw-Hill Companies,Inc.McGraw-Hill/IrwinA-37End of Appendix ACopyright 2008,The McGraw-Hill Companies,Inc.McGraw-Hill/IrwinAppendix BProfitability AnalysisCopyright 2008,The McGraw-Hi

27、ll Companies,Inc.McGraw-Hill/IrwinA-39Absolute ProfitabilityCopyright 2008,The McGraw-Hill Companies,Inc.McGraw-Hill/IrwinA-40Computing Absolute ProfitabilityCopyright 2008,The McGraw-Hill Companies,Inc.McGraw-Hill/IrwinA-41Learning Objective 1Copyright 2008,The McGraw-Hill Companies,Inc.McGraw-Hill

28、/IrwinA-42Relative ProfitabilityRelative profitability is concerned with ranking products,customers,and other business segments to determine which should be emphasized in an environment of scarce resources.Copyright 2008,The McGraw-Hill Companies,Inc.McGraw-Hill/IrwinA-43Relative ProfitabilityManage

29、rs are interested in ranking segments if a constraint forces them to make trade-offs among segments.In the absence of a constraint,all segments that are absolutely profitable should be pursued.Copyright 2008,The McGraw-Hill Companies,Inc.McGraw-Hill/IrwinA-44Relative ProfitabilityProfitabilityIndexI

30、ncremental profit from the segmentAmount of the constrained resources required by the segment=Copyright 2008,The McGraw-Hill Companies,Inc.McGraw-Hill/IrwinA-45Profitability IndexManagement of Matrix,Inc.developed the following information concerning its two segments:Segment ASegment BIncremental pr

31、ofit$100,000$200,000 Amount of constrained resource required100 hours 400 hoursProfitability index1,000$500$Copyright 2008,The McGraw-Hill Companies,Inc.McGraw-Hill/IrwinA-46Project Profitability IndexProjectProfitabilityIndexNet present value of the projectAmount of investmentrequired by the projec

32、t=From Chapter 14Copyright 2008,The McGraw-Hill Companies,Inc.McGraw-Hill/IrwinA-47Project Profitability IndexProjectProfitabilityIndexNet present value of the projectAmount of investmentrequired by the project=From Chapter 14Copyright 2008,The McGraw-Hill Companies,Inc.McGraw-Hill/IrwinA-48Project

33、Profitability IndexProjectProfitabilityIndexNet present value of the projectAmount of investmentrequired by the project=From Chapter 14Copyright 2008,The McGraw-Hill Companies,Inc.McGraw-Hill/IrwinA-49 Incremental Profit Constrained Resource Required(a)(b)(a)(b)Project A9,180$17 hours540$per hourPro

34、ject B7,200 9 hours800 per hourProject C7,040 16 hours440 per hourProject D5,680 8 hours710 per hourProject E5,330 13 hours410 per hourProject F4,280 4 hours1,070 per hourProject G4,160 13 hours320 per hourProject H3,720 12 hours310 per hourProject I3,650 5 hours730 per hourProject J2,940 3 hours980

35、 per hour100 hoursProfitability IndexQuality Kitchen Design:An ExampleCopyright 2008,The McGraw-Hill Companies,Inc.McGraw-Hill/IrwinA-50 Incremental Profit Constrained Resource Required(a)(b)(a)(b)Project A9,180$17 hours540$per hourProject B7,200 9 hours800 per hourProject C7,040 16 hours440 per hou

36、rProject D5,680 8 hours710 per hourProject E5,330 13 hours410 per hourProject F4,280 4 hours1,070 per hourProject G4,160 13 hours320 per hourProject H3,720 12 hours310 per hourProject I3,650 5 hours730 per hourProject J2,940 3 hours980 per hour100 hoursProfitability IndexQuality Kitchen Design:An Ex

37、ampleCopyright 2008,The McGraw-Hill Companies,Inc.McGraw-Hill/IrwinA-51Ranking Based on Profitability Index Incremental Profit Constrained Resource RequiredProfitability Index Cumulative Hours Incremental Profit(a)(b)(a)(b)Project F4,280$4 hours1,070$4 hours4,280$Project J2,940 3 hours980 7 hours2,9

38、40 Project B7,200 9 hours800 16 hours7,200 Project I3,650 5 hours730 21 hours3,650 Project D5,680 8 hours710 29 hours5,680 Project A9,180 17 hours540 46 hours9,180 Project C7,040 16 hours440 62 hoursProject E5,330 13 hours410 75 hoursProject G4,160 13 hours320 88 hoursProject H3,720 12 hours310 100

39、hours100 hoursCopyright 2008,The McGraw-Hill Companies,Inc.McGraw-Hill/IrwinA-52Ranking Based on Profitability IndexCopyright 2008,The McGraw-Hill Companies,Inc.McGraw-Hill/IrwinA-53Learning Objective 2Copyright 2008,The McGraw-Hill Companies,Inc.McGraw-Hill/IrwinA-54Volume Trade-Off DecisionsVolume

40、 trade-off decisions need to be made when a company must produce less than the market demands for some products due to the existence of a constraint.Copyright 2008,The McGraw-Hill Companies,Inc.McGraw-Hill/IrwinA-55Volume Trade-Off Decisions=Volume trade-off decisions need to be made when a company

41、must produce less than the market demands for some products due to the existence of a constraint.Copyright 2008,The McGraw-Hill Companies,Inc.McGraw-Hill/IrwinA-56Volume Trade-Off Decisions ExampleMatrix,Inc.produces the following three products:Copyright 2008,The McGraw-Hill Companies,Inc.McGraw-Hi

42、ll/IrwinA-57Volume Trade-Off Decisions ExampleMatrix,Inc.produces the following three products:A total of 2,700 minutesCopyright 2008,The McGraw-Hill Companies,Inc.McGraw-Hill/IrwinA-58Volume Trade-Off Decisions ExampleMatrix,Inc.produces the following three products:A total of 2,700 minutesCopyrigh

43、t 2008,The McGraw-Hill Companies,Inc.McGraw-Hill/IrwinA-59First we calculate the profitability index for each product.Volume Trade-Off Decisions ExampleCopyright 2008,The McGraw-Hill Companies,Inc.McGraw-Hill/IrwinA-60Total minutes of constrained resource2,200 Less:Minutes needed to produce 400 VB30

44、800 Available minutes1,400 Less:Minutes needed to produce 100 SQ500400 Available minutes1,000 Less:Minutes needed to produce 200 RX2001,000 Full utilization of machine time-Volume Trade-Off Decisions ExampleNext we prepare the optimal production plan.Copyright 2008,The McGraw-Hill Companies,Inc.McGr

45、aw-Hill/IrwinA-61RX200VB30SQ500Unit contribution margin15$10$16$Production per week in units200 400 100 Total contribution3,000$4,000$1,600$ProductsVolume Trade-Off Decisions ExampleLast,we compute the total contribution marginearned under the optimal production plan.Copyright 2008,The McGraw-Hill C

46、ompanies,Inc.McGraw-Hill/IrwinA-62Learning Objective 3Copyright 2008,The McGraw-Hill Companies,Inc.McGraw-Hill/IrwinA-63Sales CommissionsRX200VB30SQ500Unit selling price40$30$35$Unit variable cost25 20 19 Unit contribution margin(a)15$10$16$Contrained resource required per unit(b)5 minutes2 minutes4

47、 minutesProfitability index per minute(a)(b)3.00$5.00$4.00$ProductsSales commissions are based on gross selling price.If you were a salesperson at Matrix,which product would you prefer to sell?Copyright 2008,The McGraw-Hill Companies,Inc.McGraw-Hill/IrwinA-64Sales CommissionsRX200VB30SQ500Unit selli

48、ng price40$30$35$Unit variable cost25 20 19 Unit contribution margin(a)15$10$16$Contrained resource required per unit(b)5 minutes2 minutes4 minutesProfitability index per minute(a)(b)3.00$5.00$4.00$ProductsHowever,RX200 is the least profitable product,given the current machine constraint.It might be

49、a better idea to base sales commissions on theprofitability index for each product.Copyright 2008,The McGraw-Hill Companies,Inc.McGraw-Hill/IrwinA-65Pricing New ProductsThe price of a new product should cover at least the variable cost of producing it plus the opportunity cost of displacing the prod

50、uction of existing products to make it.Copyright 2008,The McGraw-Hill Companies,Inc.McGraw-Hill/IrwinA-66Pricing New ProductsCopyright 2008,The McGraw-Hill Companies,Inc.McGraw-Hill/IrwinA-67Pricing New ProductsThe first step is to recognize that the price ofWR6000 must cover its$30 variable cost pe

51、r unit.Copyright 2008,The McGraw-Hill Companies,Inc.McGraw-Hill/IrwinA-68Pricing New ProductsThe second step is to recognize that producing WR6000 will require displacing production of RX200,VB30,or SQ500.Since RX200 has the lowest profitability indexof$3 per minute it should be displaced first.Copy

52、right 2008,The McGraw-Hill Companies,Inc.McGraw-Hill/IrwinA-69Pricing New ProductsThe third step is to compute the opportunity cost per unit associated with displacing production of RX200($18 per unit).Copyright 2008,The McGraw-Hill Companies,Inc.McGraw-Hill/IrwinA-70Pricing New ProductsThe fourth step is to add the variable cost per unit($30)to the opportunity cost per unit($18)to arrive at the minimum selling price($48).Copyright 2008,The McGraw-Hill Companies,Inc.McGraw-Hill/IrwinA-71End of Appendix B