MindMap Gallery Cost Management Goals, Responsibilities and Standards
With the continuous development of my country's coal mining enterprises, the competition and challenges they face are also increasing. The operation of coal mining enterprises must focus on improving economic efficiency while reducing the operating costs of the enterprise as much as possible, and effectively carry out cost budget management.
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This is a mind map about bacteria, and its main contents include: overview, morphology, types, structure, reproduction, distribution, application, and expansion. The summary is comprehensive and meticulous, suitable as review materials.
This is a mind map about plant asexual reproduction, and its main contents include: concept, spore reproduction, vegetative reproduction, tissue culture, and buds. The summary is comprehensive and meticulous, suitable as review materials.
This is a mind map about the reproductive development of animals, and its main contents include: insects, frogs, birds, sexual reproduction, and asexual reproduction. The summary is comprehensive and meticulous, suitable as review materials.
Cost Management: Goals, Responsibilities and Standards
target cost management
target cost
The role of target costing
1. Target cost management is the strategic management of costs
2. Target cost management is the cost management of product life cycle
Determination of target cost
1. Collect cost information
2. Determine target profit
3. Preliminarily determine the target cost
Target total cost = forecast sales revenue - forecast taxes - target profit
Target unit cost = forecast sales price × (1-tax rate) - forecast unit target profit
4. Determine target cost
Addition algorithm: Add the cost necessary for additional functions to the baseline cost estimated based on its technical level and operating capabilities, subtract the eliminateable operating costs, and obtain the cost of the new product.
Inverse method: Target cost = sales revenue - sales tax and surcharge - target profit Unit target cost = product unit price × (1 - product sales tax rate) - target profit/sales volume
Comparison method: Determine the target cost by comparing it with the standard cost and quota cost determined by the cost level of advanced enterprises or the average advanced level. Applicable to older products
Regression analysis method: Each product specification in the series has a certain linear relationship with a certain functional characteristic or technical parameter y=a (fixed cost) b (unit variable cost) x target cost under a certain business volume x
Formula method: target cost = competitive market price/sales unit price × actual cost
Breakdown of target costs
1. Break down target costs by organizational structure
Decompose from top to bottom and propose guarantee measures from bottom to top
2. Decompose target costs by product structure
Parts, components, finished products
3. Decompose target costs according to cost formation process
Supply process, production process and sales process
4. Decompose target costs by cost items and cost characteristics
Direct materials: costs caused by changes in consumption in production and prices in supply; direct labor: costs caused by changes in fixed working hours and costs caused by changes in hourly wage rates; manufacturing overhead: the relationship with output is divided into variable and fixed manufacturing cost
Responsible cost management
Responsibility center (determined by established scope of responsibilities and authorities)
Cost Center
Units within the enterprise that incur costs, need to be responsible for costs and can implement cost control can become cost centers. Subsidiaries, workshops, sections, teams or individuals under the group can become cost centers.
The essence of the functional departments of an enterprise is the expense center. In responsibility management, expense centers are generally classified as cost centers.
Profit Center
It is an internal responsible unit that is responsible for not only costs and expenses, but also revenue and profits. It is at a higher level of the enterprise and has independent management rights for product production or labor service provision, such as branch factories, branches, and branch companies.
Natural profit center: an internal responsible unit that can independently produce complete products and can independently calculate product profits and losses, such as workshops set up by product
Artificial profit center: an internal responsible unit that cannot independently produce complete products and can only produce parts and components, but can calculate the profits and losses of parts and components through internal transfer prices, such as workshops set up according to processes
investment center
It is an internal responsible unit that is responsible not only for costs and profits, but also for investments and investment returns, and consists of profit centers and cost centers. Enjoy autonomy in product production and sales, and be able to independently use the funds at their disposal for investment.
Hierarchy of cost centers
A high-level cost center has many responsibility costs, a wide control area, and strong coordination capabilities, but its ability to control specific cost projects is relatively weak. The opposite is true for low levels.
Responsibility costs (controllable costs)
1. Controllable costs
The responsibility center can understand the upcoming costs in a certain way
Responsibility centers can measure costs
The responsibility center can control and adjust costs through its own actions
2. Collection of liability costs
Responsibility costs incurred directly by each cost center
Costs that occur in other cost centers and should be borne by this cost center according to the responsibility attribution principle
3. Responsibility costs of the production department
The costs of direct materials and semi-finished products need to be valued according to internal settlement prices in order to distinguish the responsibilities between different departments.
Items such as fixed asset depreciation and overhaul expenses in manufacturing expenses need to be dealt with according to the situation.
4. Responsibility costs of the purchasing department
The procurement cost of materials and supplies, various expenses incurred by the purchasing department, and the inventory surplus of materials and supplies. Inventory losses, damage, etc., material storage costs, scrap losses due to material quality problems, production department shutdown losses due to supply of materials according to planned time, etc., waste caused by materials that do not conform to specified models, standards, etc.
standard cost management
Standard costs and cost variances
1. Types of standard costs
ideal standard cost
The direction and goals of enterprise efforts
normal standard cost
Reflects the average actual cost level over the past period, the average production capacity and technical capabilities of the industry
realistic standard cost
2. Establishment of standard costs
Standard cost = quantity standard × price standard
The standard cost of a certain material consumed by a certain unit of product = standard usage × standard price
Direct material standard cost of a certain unit of product = ∑ Various materials consumed by the product
Direct labor standard cost per unit product = working hour usage standard × hourly wage rate standard
Hourly wage rate standard = total expected wages paid to production workers/total standard working hours
Total standard working hours = standard output × standard unit working hours
Standard manufacturing overhead cost per unit product = standard working hours × standard manufacturing overhead allocation rate = standard working hours per unit product × fixed manufacturing overhead allocation rate Standard working hours per unit product × variable manufacturing overhead allocation rate
Price standard: Standard manufacturing overhead allocation rate = manufacturing overhead budget / standard output × unit standard working hours
3. Types of cost differences (standard differences, actual vs. standard)
direct materials cost variance
direct labor cost variance
manufacturing overhead variance
Variable manufacturing overhead variance
Fixed manufacturing overhead variance
4.The role of standard cost
Facilitate enterprise budget preparation and budget control
Effectively control costs and expenditures
Can provide data for enterprise exception management
Help companies make product price predictions and decisions
Can simplify inventory valuation and cost accounting work
Calculation, analysis and control of variable cost differences
direct materials cost variance
direct labor cost variance
Labor efficiency difference (quantity) = standard wage rate × (actual working hours - standard working hours)
Wage rate difference (price) = actual working hours × (actual wage rate – standard wage rate)
Variable manufacturing overhead cost variance
Variable Cost Efficiency Variance
variable cost difference
Cost difference = actual cost - standard cost Price difference = actual quantity × (actual price - standard price) Quantity difference = standard price × (actual quantity - standard quantity)
Calculation, analysis and control of fixed manufacturing overhead cost variances
1. Analysis and control of fixed manufacturing overhead cost differences
Fixed manufacturing overhead cost variance = actual total fixed manufacturing overhead – actual output × standard working hours × fixed manufacturing overhead standard allocation rate
Standard allocation rate of fixed manufacturing overhead = budgeted amount of fixed manufacturing overhead/budgeted output × standard working hours
two difference method
Budget variance ➕Production (energy) variance
Fixed manufacturing overhead budget variance = actual fixed manufacturing overhead – budgeted fixed manufacturing overhead (the difference between actual expenditure and budget)
Fixed manufacturing overhead output variance = actual fixed manufacturing overhead number - actual output standard working hours × fixed manufacturing overhead standard allocation rate = (budgeted output standard working hours - actual output standard working hours) × fixed manufacturing overhead standard allocation rate (actual output deviates from budgeted output) reflects The degree of utilization of enterprise production energy
Three differences method
2. Analysis and control of fixed manufacturing overhead cost differences