1 / 15

Chapter 9

Chapter 9. Cost Accounting for Service Businesses and the Balanced Scorecard. Learning Objectives. LO1 Perform job order costing for service businesses. LO2 Prepare budgets for service businesses. LO3 Apply activity-based costing for a service firm.

mallorie
Télécharger la présentation

Chapter 9

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Chapter 9 Cost Accounting for Service Businesses and the Balanced Scorecard

  2. Learning Objectives LO1 Perform job order costing for service businesses. LO2 Prepare budgets for service businesses. LO3 Apply activity-based costing for a service firm. LO4 Compare the results of cost allocations using simplified costing versus activity- based costing. LO5 Prepare a balanced scorecard for various business entities.

  3. Characteristics of a Service Business • Typically have little or no inventory. • Labor costs often comprise 75% or more of the total costs. • Approximately 90% of jobs created in the U.S. in the past 20 year have been service industries.

  4. Job Order Costing for Service Businesses • When the amount of complexity of service provided varies from customer to customer, a job order costing system should be used.

  5. Job Cost Sheet • The basic document used to accumulate costs for a service business. • Will indicate labor time, labor rate, and the total cost for each labor category worked. • Other direct costs may be traced to the individual jobs.

  6. Budgeting for Service Businesses • Revenue budget. • Labor budget. • Overhead budget. • Other direct expenses budget. • Budgeted income statement.

  7. Activity-Based Costing in a Service Firm • Firms that use activity-based costing attempt to shift as many costs as possible out of the indirect cost pool and into direct cost pools that can be specifically traced to individual jobs. • Remaining costs are separated into homogeneous cost pools and allocated to individual jobs via separate allocation bases for each pool.

  8. Activity-Based Costing vs. Simplified Costing • Activity-based costing is worthwhile to implement when different jobs use resources in different proportions. • Should be a cost/benefit decision as to whether to implement a more sophisticated costing system.

  9. Simplified Job Costing for a Law Firm

  10. Activity-Based Costing for a Law Firm

  11. The Four Categories of a Balanced Scorecard • Financial • Customer • Internal Business Processes • Learning and Growth

  12. Financial • Return on Investment (ROI) • Operating Income • Gross Margin Percentage • Revenue from New Products

  13. Customer • Number of New Customers • Market Share • Percentage of Products Returned • Customer Satisfaction Surveys

  14. Internal Business Processes • Percentage of On-Time Deliveries • Percentage of Defect-Free Units Produced • Time Taken to Replace Defective Products • Time From Receipt of Order to Shipment

  15. Learning and Growth • Employee Turnover • Number of Employee suggestions • Percentage of Employees Trained in New Processes • Percentage of Compensation Based on Employee/Team Performance

More Related