ACTIVITY BASED

COST SYSTEM
 PERHITUNGAN BIAYA dan
BIAYA PER UNIT
• Perhitungan biaya berdasarkan fungsi dan aktifitas
membebankan biaya pada objek biaya seperti
produk, pelanggan, pemasok, bahan baku dan
pemasaran.
• Biaya per unit dengan membagi jumlah biaya
dengan unit dari objek tertentu.
• Biaya unit (unit cost) adalah jumlah biaya yang
berkaitan dengan unit yang diproduksi dibagi
dengan jumlah unit yang diproduksi.
 PERHITUNGAN BIAYA dan
BIAYA PER UNIT
• Emma James Jessica Matthew Total Average
• Entree $11 $20 $15 $14 $ 60 $15
• Dessert 0 8 4 4 16 4
• Drinks 4 14 8 6 32 8
• Total $15 $42 $27 $24 $108 $27
 PERHITUNGAN BIAYA dan
BIAYA PER UNIT
• Masalah yang dihadapi dalam Perhitungan Biaya dan
Biaya per Unit :
• Jumlah biaya, apakah hanya biaya produksi atau biaya
produksi ditambah biaya pemasaran atau semua biaya
perusahaan,
• Bagaimana mengukur biaya (cost measurement), apakah
menggunakan biaya actual atau perkiraan, penentuan
jumlah rupiah bahan baku langsung, tenaga kerja langsung
dan overhead yang digunakan produksi.
• Bagaimana menetapkan biaya atas produk.
 PERHITUNGAN BIAYA dan
BIAYA PER UNIT
• Pentingnya Biaya per Unit
• Sistem akuntansi biaya mengukur dan membebankan biaya
agar biaya per unit dari suatu produk atau jasa dapat
ditentukan.
• Biaya per unit merupakan informasi penting untuk
perusahaan manufaktur antara lain penawaran harga untuk
produk khusus, audit, keputusan mengenai desain,
keputusan membuat atau membeli produk atau jasa.
• Keakuratan perhitungan biaya per unit menjadi penting
• Distorsi biaya produksi per unit tidak dapat diterima.
PERHITUNGAN BIAYA
PRODUK PER UNIT

PENGUKURAN
BIAYA PEMBEBANAN
BIAYA PRODUK
(COST BIAYA
MEASUREMENT)
DIRECT
COST
(ACTUAL)
BIAYA BIAYA
AKTUAL NORMAL

OVERHEAD
COST
(ESTIMASI)

INFORMASI BIAYA PER

UNIT
PEMBEBANAN BIAYA

PEMBEBANAN
BIAYA
(COST ASSIGNMENT)

BERDASARKAN BERDASARKAN
FUNGSI AKTIFITAS
 Functional Based Product Costing

• Predetermined rate is calculated at the beginning of the

year using formula :
• Overhead rate = budgeted annual overhead/budgeted annual driver
level
• Predetermine rates are used because overhead and
production often are incurred non uniformity throughout
the year.
• A cost system that uses predetermined overhead rates and
actual cost for direct materials and direct labour is referred
to as normal costing system.
 Functional-Based Product Costing

• Product costing system start by assigning direct labour and direct materials
costs to products.
• Assignment of overhead must rely on driver tracing and perhaps on
allocation.

Direct Direct
Labour Overhead
Materials

Driver tracing
Direct Direct Allocation
Tracing Tracing Plant/Dep
Pool

Unit based Driver

P RO D U C T S
 Functional Based Product Costing

• Budgeted overhead is often based on last year’s

figures, adjusted for anticipated changes in the
coming year. The second input requires that the
predicted level for an activity driver be
specified.
• Drivers are the causal factors that measure the
consumption of overhead by products.
 Functional Based Product Costing

• In functional based costing, only unit level drivers are used to calculate
overhead rates.
• Unit level drivers are factors that measure the demands placed on unit
level activities by products.
• Unit level activities are activities performed each and every time a unit of
product is produced.
• The five most commonly used unit level drivers :
1. Unit produced,
2. Direct labour hours,
3. Direct labour dollars
4. Machine hours
5. Direct material dollars
 ACTIVITY CAPACITY
• Ukuran Kapasitas Aktifitas

THEORITICAL
ACTIVITY
CAPACITY

PRACTICAL ACTIVITY
CAPACITY

EXPECTED ACTIVITY
CAPACITY
NORMAL ACTIVITY
CAPACITY
 Functional Based Product Costing

• Unit level drivers increase as units produced increase.

• Plantwide or departmental predetermined overhead
are used to assign or apply overhead costs to
production as the actual production activity unfolds.
• The total overhead assigned to actual production at
any point in time is called applied overhead.
• Formula : Applied overhead = Overhead rate x
actual driver usage
 Overhead Application

• Example :
• Suncalc, Inc, produce two unique, solar-powered products : a pocket calculator and
currency translator used to convert foreign currency into US Dollars and vice versa.
Suncalc uses a plantwide rate based on direct-labour hours to assign its overhead
costs. The company has the following estimated and actual data for the coming year :
• Budgeted overhead $ 360,000
• Expected activity (in direct labour hours) 120,000
• Actual activity (in direct labour hours) :
• Pocket Calculator 40,000
• Currency translator 60,000 100,000
• Actual overhead 320,000
• Unit produced :
• Pocket calculator 80,000
• Currency translator 90,000
 Overhead Application

• The overhead rate to be used is calculated as

follows :
• Predetermined overhead rate :
Budgeted overhead/budgeted (expected) activity
$ 360,000/120,000 direct labour hours = $3 per DLH
• Applied overhead = overhead rate X Actual activity
usage
= $ 3 per DLH x 100,000 DLH
= $ 300,000
 Overhead Application

• Per Unit Overhead Cost

• The predetermined overhead rate is the basis for per unit overhead cost calculation :
Pocket calculator Currency translator
----------------------------------------------------
• Unit produced 80,000 90,000
• Direct labour hours 40,000 60,000
• Overhead applied to
production($3 x DHL) $120,000 $180,000
• Overhead per unit *) $1.50 $2.00

*) overhead applied/unit
produced
 Overhead Application

• The amount of overhead applied to production ($300,000) differs from the

actual overhead incurred ($320,000), the firm have under applied $20,000.
• The difference between actual overhead and applied overhead is an
overhead variance. If actual overhead greater than applied overhead, the
variance is called under applied overhead and if applied overhead is
greater than actual overhead, the variance is called over applied overhead.
• An overhead variance is disposed of in one of two ways :
• If immaterial, it is assigned to cost of goods sold
• If material, it is allocated among WIP inventory, finished goods inventory, and
cost of goods sold.
 Overhead Application

• Departmental Rate
• For departmental rate, overhead costs are first assigned to individual production
department, creating departmental overhead cost pools.
• Example :
• Assume that Suncalc has two producing department : fabrication and assembly. Machine hours are
used to assign the overhead of Fabrication and direct labour hours are used assign the overhead of
Assembly.
• The following data are provided :
Fabrication Assembly Total
---------------------------------------------------------------------------------------
Overhead $280,000 $80,000 $360,000
Direct labour hours :
Pocket calculator 10,000 30,000 40,000
Currency translator 10,000 50,000 60,000
Total 20,000 80,000 100,000
Machine hours :
Pocket calculator 5,000 1,000 6,000
Currency Translator 15,000 2,000 17,000
Total 20,000 3,000 23,000
 Overhead Application
• Predetermined rate calculated for each department:

• Fabrication (based on machines hours)

• Rate = $280,000/20,000 = $ 14 per machines hour
• Assembly (based on direct labour hours)
• Rate = $80,000/80,000 = $1 per direct labour hour
• Per Unit overhead cost for each product can be calculated :
Pocket calculator Currency translator
--------------------------------------------------------------------------------------------
Overhead applied to production:
Fabrication:
$14 X 5,000 $70,000
$14 X 15,000 $ 210,000
Assembly
$1 X 30,000 30,000
$1 X 50,000 50,000
Total $100,000 $260,000
Unit produced 80,000 90,000
Overhead per unit *) $1.25 $2.89
*) Overhead applied/Units produced
 Overhead Application

• Limitations of Plantwide and Departmental Rates

• Two major factors can impair the ability of the unit based
plantwide and departmental rates to assign overhead cost
accurately:
1. The proportion of non-unit- related overhead costs to total overhead
2. The degree of product diversity is large.
• Non-unit-related Overhead Costs
• Some cost do not change as a function of the batch size.
• Example- set up cost and product engineering costs
• Non unit based drivers are factors other than the number of units
produced, that casually measure the demand that products place on
activities.
• Non unit related overhead costs can generate distorted product cost.
 Overhead Application

• Limitations of Plantwide and Departmental Rates

• Product Diversity
• Product diversity means that products consume overhead
activities in different proportions.
• The proportion of each activity consumed by a product is defined
consumption ratio.
• Since functional based system use average allocation rates to
assign overhead costs across the entire product line, they tend
to under-apply overhead costs to highly complex products,
and over apply overhead costs to less complex products.
• Product diversity can produce distorted product cost when only
unit-level drivers are used to assign overhead costs.
 Activity- Based Costing System
• Activity Based Costing System may be useful for a firm, when :
1. Multiple products are needed,
2. There must be product diversity
3. Non-unit-level overhead must be a significant percentage of production cost.
• ABC Model
Resource Drivers

Direct Direct Direct

Direct
Materials Overhead
Labour
Tracing
Direct Tracing

Activity
Activity Drivers Cost Pools

PRODUCTS
 Activity Based Costing System

• Design Steps for an ABC System

1. Identify, define, and classify activities and key attributes,
2. Assign the cost of resources to activities,
3. Assign the cost of secondary activities to primary
activities,
4. Identify cost objects and specify the amount of each
activity consumed by specific cost objects,
5. Calculate primary activities rates,
6. Assign activity costs to cost object
 Activity Based Costing System

• Activity Identification, Definition, and

Classification
• Activities represent action taken or work performed by equipment or
people for other people.
• Identifying an activity is equivalent to describing action taken-usually by
using an action verb and an object that receives the action.
• A simple list activities identification is called activity inventory.
• Activity attributes are nonfinancial and financial information items that
describe individual activities. The attributes selected depends on the
purpose being served. Example : types of resources consumed by activity,
percentage of time spent on activity by workers, measure of activity
consumption ( cost driver ).
 Activity Based Costing System

• Activity Identification, Definition, and

Classification
• Activity dictionary lists the activities in an organization
along with desired attributes.
• Activity Classification facilitates the achievement of key
managerial objectives such as product or customer costing,
continuous improvement, total quality management and
environmental cost management.
• For costing purposes activities can be classified as primary
and secondary activity.
 Activity Based Costing System

• Activity Identification, Definition, and

Classification
• A primary activity is an activity that is consumed by a final cost
object such as a product or customer.
• A secondary activity is one that is consumed by intermediate cost
objects such as primary activities, materials, or other secondary
activities.
• Activity dictionary is describes the task that make up the activity,
classifies as primary or secondary, lists the users ( cost objects) and
identifies a measures of activity output ( activity driver ).
 Activity Based Costing System

• Assigning Costs of Overhead Resources to Activities

• After identifying and describing activities, the next task is determining how much
it costs to perform each activity.
• The cost of an activity is simply the cost of the resources consumed by the activity,
such as labour, materials and energy and capital.
• Assigning Secondary Activity Costs to Primary Activities
• If there are secondary activities, then intermediate stages exist. In intermediate
stage, the cost of secondary activities is assigned to those activities that consumed
their output.
• Cost Object and Bills of Activities
• Once the cost of primary activities are determined, these cost then can be assigned
to products or other cost objects in proportion to their usage of the activity, as
measured by activity drivers.
 Activity Based Costing System

• Activity rates and Product Costing

• Primary activity rates are computed by dividing the
budgeted activity costs by practical activity capacity,
where activity capacity is the amount of activity output
(as measured by the activity driver).
• Practical capacity is the activity output that can be
produced if the activity is performed efficiently.
 Considerations in Implementing
Activity-Based Costing Systems
• Benefits and Costs of Activity Based Costing Systems
• The signs of when an ABC system is likely to provide the most benefits :
• Significant amount of indirect cost are allocated using only one or two cost
pools,
• All or most indirect costs are identified as output unit-level costs (few indirect
costs described as batch-level costs, product –sustaining costs, or facility
sustaining costs)
• Products make diverse demands on resources because of differences in volume,
process steps, batch size , or complexity,
• Products that a company is well-suited to make and sell show small profits;
whereas products that a company is less suited to make and sell show large
profits,
• Operating staff has substantial disagreement with the reported costs of
manufacturing and marketing products and services.
Behavioural Issues in Implementing
Activity-Based Costing System
• Successfully implementing ABC system requires more than an understanding of
the technical details. ABC implementation often represents a significant change in
the costing system and, requires a manager to choose how define activities and
the level of detail.
• Some of behavioural issues that must be sensitive to :
1. Gaining support of top management and creating a sense of urgency for the
ABC effort,
2. Lack of business purpose,
3. Creating a guiding coalition of manager throughout the value chain for the
ABC effort,
4. Educating and training employees in ABC a a basis for employee
empowerment,
5. Delegating the project to consultant,
Behavioural Issues in Implementing
Activity-Based Costing System
• Some of behavioural issues that must be sensitive to :
1. Seeking small short-run success as a proof the ABC
implementation is yielding results,
2. Recognizing that ABC information is not perfect
because it balances the need for better information
against the cost of creating a complex system that
a few managers and employees can understand.
3. Individual and organizational resistance to change,
4. People feel threatened.
 Activity-Based Management

• Activity Based Management is a method of

management decision making that uses activity based
costing information to improve customer satisfaction
and profitability, include :
• decision about pricing and product mix,
• cost reduction,
• process improvement,
• and product and process design.
ABC in Service and Merchandising
Companies

• ABC also use in service and merchandising companies.

• Service company using ABC system to identify profitable
product mixes, improve efficiency, and satisfy customers.
• ABC system in service and merchandising companies reinforce
the idea ABC are used by managers for strategic decision rather
than for inventory valuation.
• Service companies, in particular, find great value from ABC
because a vast majority of their cost structure is composed of
indirect cost.
Thank You