Target total cost = forecast sales revenue - forecast taxes - target profit

Target unit cost = forecast sales price × (1-tax rate) - forecast unit target profit

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

Decompose from top to bottom and propose guarantee measures from bottom to top

Parts, components, finished products

Supply process, production process and sales process

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

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.

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

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.

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

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

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.

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.

ideal standard cost

normal standard cost

realistic standard cost

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

direct materials cost variance

direct labor cost variance

manufacturing overhead variance

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

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 Cost Efficiency Variance

variable cost difference

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

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