2 -1

CHAPTER

Basic
Management
Accounting
Concepts

2 -2

Objectives
Objectives
1.

After
After studying
studying this
this
you
you should
should be
be aa

Describe the cost assignment process. (mendeskripsikan

proses pembebanan biaya)
2. Define tangible and intangible products and explain why
there are different product cost definitions. (mendefinisikan
produk berwujud dan tdk berwujud dan menjelaskan
perbedaan definisi biaya produk)
3. Prepare income statements for manufacturing and service
organizations. (menyusun lap laba rugi untuk organisasi
manufaktur dan jasa)
4. Outline the differences between functional-based and
activity-based management accounting systems.
(menjelaskan sistem akmen berdasar fungsi dan aktivitas)

2 -3

Cost
the
cash-equivalent
II is
see
Its
Cost
is
the cash
cash
cash-equivalent value
value
see
Itsaor
aordollar
dollar
sacrificed
for
measure
of
sacrificed
for goods
goods
and services
services that
that isis
measure
ofthe
theand
expected
to
future
resources
used
expected
to bring
bring
atocurrent
current or
orExactly
future what
Exactly
what isis
resources
usedato
benefit
the
meant
achieve
benefitato
the organization.
organization.
meant by
by cost?
cost?
achieve
atogiven
given
benefit.
benefit.

2 -4

A cost object is any item such as products, customers, departments,

projects, activities, and so on, for which costs are measured and
assigned.( obyek biaya dapat berupa, produk, pelanggang
,departemen dll)
Example:
Example A bicycle is a cost object when you are determining the
cost to produce a bicycle. (biaya membuat sebuah .)
An activity is a basic unit of work performed within an organization.
(unit dasar kerja yang dilakukan dalan organisasi)
Example: Setting up equipment, moving materials, maintaining
equipment, designing products, etc. (pemasangan
peralatan, pemindahan bahan, pemeliharaan peralatan,
dll)

2 -5

Traceability is the ability to assign a cost to a cost object in

an economically feasible way by means of a cause-and-effect
relationship. (kemampuan untuk membebankan by ke
objek by dgn cara yang layak secara ekonomi berdasarkan
hubungan sebab akibat)
Direct costs are those costs that can be easily and accurately
traced to a cost object. (by yang dengan mudah dan akurat
ditelusuri sebagai objek biaya)
Example: If a hospital is the cost object,
the cost of heating and
cooling the hospital is
a direct cost.

2 -6

Indirect costs are those costs that cannot be

easily and accurately traced to a cost object.
Example: The salary of a plant manager, where
departments within the plant are defined
as the cost objects.

2 -7

Tracing is the actual assignment of costs to a cost

object using an observable measure of the resources
consumed by the cost object. Tracing costs to cost
objects can occur in the following two ways:
Direct tracing is the process of identifying and assigning
costs that are exclusively and physically associated with a
cost object to that cost object.
Driver tracing is the use of drivers to assign costs to cost
objects. Drivers are observable causal factors that
measure a cost objects resource consumption.

2 -8

Cost
Cost Assignment
Assignment Methods
Methods
Cost of Resources

Direct
Tracing

Driver
Tracing

Allocation

Physical
Observation

Causal
Relationship

Assumed
Relationship

Cost Objects

Interface of Services with

Management Accounting (interaksi jasa dgn akunt manajemen

2 -9

Services
cannot
be
stored.
Services
cannot
be
stored.
1. Intangibility (ketidak
No
patent
protection.
No
patent
protection.
wujudan)
Services
benefits
expire
Services
benefits
expire
Cannot
display
or
Cannot
display
or
quickly.
Customer
directly
quickly. directly
Customer
2. Perishability(tdk tahah
communicate
services.
communicate
services.
Services
may
be
repeated
involved
with
Services
may
be
repeated
involved
with
lama)
Price
difficult
to
set.
Price
difficult
to
set.
often
for
one
customer.
production
of
service.
often
for
one
customer.
production
of
service.
3. Inseparability(tdk dpt
Centralized
mass
Centralized
mass
dipisah)
production
of
services
Wide
variation
service
production
ofin
services
Wide
variation
in
service
difficult.
products
difficult.
products possible.
possible.
4. Heterogeneity
Derived
Derived Properties
Properties

Interface of Services with

Management Accounting
1.

2.
3.
4.

2 -10

No
No inventories.
inventories.
Intangibility
Strong
Strong ethical
ethical code.
code.
Price
difficult
to
set.
No
inventories.
Price
difficult
to
set.
No
inventories.
Costs
often
accounted
Perishability
Costs
often
accounted
Demand
for
more
accurate
Need
for
standards
and
Demand
for
more
accurate
Need
for
standards
and
for
by
customer
type.
forassignments.
by customer
type.
cost
consistent
high
quality.
cost
assignments.
consistent
high
quality.
Demand
for
measureInseparability
Productivity
and
quality
Demand for and
measureProductivity
quality
ment
measurement
and
ment and
and control
control
of
measurement
andof
quality
maintain
control
must
be
Heterogeneity
quality to
to
maintain
control
must
be
consistency.
ongoing.
consistency.
ongoing.
Total
quality
manageTotal
quality
manageImpact
on
Management
Impact on Management
ment
critical.
ment
critical.
Accounting
Accounting

2 -11

Product cost is a cost assignment that supports a

well-specified managerial object. Thus, what
product cost means depends on the managerial
objective being served.(Biaya produk ad.
Pembebanan biaya yang mendukung tujuan
manajerialyg spesifik, jadi arti dari by prod
tergantung pada tujuan manajerial yg sedang
berusaha dicapai)

2 -12

Design

Service

Develop

Distribute

Produce

Market

Product Costing Definitions

Operating Product
Costs

Traditional Product
Costs

Production

Production

Production

Marketing

Marketing

Customer
Service

Customer
Service

Value-Chain
Product Costs

Managerial objectives served

2 -13

Research and
Development

Pricing Decisions
Strategic Design Decisions
Product-Mix Decisions
Tactical Profitability
Strategic Profitability
Analysis
Analysis

External Financial
Reporting

2 -14

Direct materials are those materials that are directly

traceable to the goods or services being produced.
Steel in an automobile (besi pada mobil)
Wood in furniture (kayu pada perabotan)
Alcohol in cologne(alkohol pda pemb
muka)
Denim in jeans ()kain pada jeans
Braces for correcting teeth (kawat untuk
perbaikan gigi)

2 -15

Direct labor is the labor that is directly traceable to

the goods or services being produced.
Workers on an assembly line at
Chrysler (pekerja pada lini perakitan )
A chef in a restaurant (kepala koki
restoran)
A surgical nurse attending an open
heart operation (perawat bedah yg
terlibat pada operasi jantung)
Airline pilot (pilot garuda airline)

2 -16

Overhead are all other production costs.

Depreciation on building
and equipment
Maintenance
Supplies
Supervision
Power
Property taxes

2 -17

Noninventoriable
Noninventoriable (period)
(period) costs
costs
are
are expensed
expensed in
in the
the period
period in
in
which
which they
they are
are incurred.
incurred.
Salaries and commissions of
sales personnel (marketing)
Advertising (marketing)
Legal fees (administrative)
Printing the annual report
(administrative)

2 -18

Prime Cost :
Direct Materials Costs + Direct Labor Costs

Conversion Cost:
Direct Labor Costs + Overhead Costs

2 -19

External
Financial
Statements

Manufacturing Organization
Income Statement
For the Year Ended December 31, 2004
Sales

$2,800,000

Less cost of goods sold:

Beginning finished goods inventory
Add: Cost of goods manufactured
Cost of goods available for sale
Less: Ending finished goods inventory

$ 500,000
1,200,000
$1,700,000
300,000 1,400,000

Gross margin

$1,400,000

Less operating expenses:

Selling expenses
Administrative expenses
Income before taxes

$ 600,000
300,000

900,000
$ 500,000

2 -20
2-20

Statement of Cost of Goods Manufactured

For the Year Ended December 31, 2004
Direct materials:
Beginning inventory
$200,000
Add: Purchases
450,000
Materials available
$650,000
Less: Ending inventory
50,000
Direct materials used
$ 600,000
Direct labor
350,000
Manufacturing overhead:
Indirect labor
$122,500
Depreciation
177,500
Rent
50,000
Utilities
37,500
Property taxes
12,500
Maintenance
50,000
450,000
Total manufacturing costs added
$1,400,000
continued
continuedon
onnext
nextslide
slide

2 -21
2-21

2 -22

Total manufacturing costs added

Add: Beginning work in process
Total manufacturing costs
Less: Ending work in process
Cost of goods manufactured

Work in process consists of all

partially completed units found in
production at a given point in time.

$1,400,000
200,000
$1,600,000
400,000
$1,200,000

Service Organization
Income Statement
For the Year Ended December 31, 2004
Sales
Less expenses:
Cost of services sold:
Beginning work in process
Service costs added:
Direct materials
Direct labor
Overhead
Total
Less: Ending work in process
Gross margin
Less operating expenses:
Selling expenses
Administrative expenses
Income before income taxes

2 -23
2-23

$300,000

$ 5,000
$ 40,000
80,000
100,000

220,000
$225,000
10,000

8,000
22,000

215,000
$ 85,000

30,000
$ 55,000

Functional-Based
Functional-Based
Management
Management Model
Model
Cost View

Resources
Operational View

Efficiency
Analysis

Functions

Products

Performance
Analysis

2 -24

Activity-Based
Activity-Based
Management
Management Model
Model

2 -25

Cost View

Resources
Process View

Driver
Analysis

Activities

Performance
Analysis

Why?

What?

How Well?

Products and
Customers

Functional-Based
1. Penggerak berdasarkan unit

Activity-Based

2. Allocation-intensive

1. Penggerak berdasarkan
unit dan non unit
2. Tracing intensive

3. Pembiayaan produk sempit

dan kaku

3. Pembiayaan produk luas

dan fleksibel

4. Fokus pada pengelolaan

biaya

4. Fokus pada pengelolaan

aktivitas
5. Informasi aktivitas rinci

5. Informasi aktivitas sedikit

6. Maksimilisasi dari kinerja
unit individu
7. Penggunaan ukuran kinerja
finansial

6. Maksimilisasi kinerja
meluas
7. Use of both financial and
nonfinancial measures of
performance

2 -26

2 -27

Chapter Two

The
The End
End

2 -28