Business Strategies A business strategy is an integrated set of plans and actions designed to enable the business to gain an advantage over its competitors, and in doing so, to maximize its profits.

Business Strategies Under a low-cost strategy, a business designs and produces products or services of acceptable quality at a cost lower than that of its competitors. Wal-Mart Southwest Airlines

Business Strategies Under a differential strategy, a business designs and produces products or services that possess unique attributes or characteristics which customers are willing to pay a premium price. Maytag Tommy Hilfiger

Value Chain of a Business A value chain is the way a business adds value for its customers by processing inputs into product or service. Inputs Business Processes Products or Services Customer Value

Merchandising Business Types of Businesses Merchandising Business Product Wal-Mart General merchandise Toys “R” Us Toys Circuit City Consumer electronics Lands’ End Apparel Amazon.com Internet books, music, video retailer

Karakteristik Operasi Perusahaan Dagang Gudang Barang Bagian Penjualan Bagian Administratif/Umum Kustomer Penjualan Kos barang terjual Sediaan, awal Pembelian Sediaan, akhir Laba kotor Biaya penjualan Biaya administratif Laba operasi XXX Statemen laba-rugi Penjualan

Financial Statements for Merchandising Companies BALANCE SHEET INCOME STATEMENT Inventoriable Costs Sales Revenue when sales occur deduct Purchases of Inventory plus Freight-In Inventory Cost of Goods Sold equals Gross Margin deduct Period Costs Operating Expenses equals Operating Income

Manufacturing Business Types of Businesses Manufacturing Business Product General Motors Cars, trucks, vans Intel Computer chips Boeing Jet aircraft Nike Athletic shoes and apparel Coca-Cola Beverages Sony Stereos and television

Karakteristik Operasi Perusahaan Manufaktur Gudang Barang Pembelian Gudang bahan baku Statemen laba-rugi Barang jadi Kos barang terjual Penjualan Biaya penjualan Bagian Penjualan Biaya administratif Laporan kos produksi Pabrik Bagian Administratif/Umum Kos barang manufakturan

Financial Statements for Manufacturing Companies BALANCE SHEET INCOME STATEMENT Inventoriable Costs Sales Revenue Materials Inventory when sales occur deduct Finished Goods Inventory Cost of Goods Sold equals Gross Margin deduct Work in Process Inventory Period Costs Operating Expenses equals Operating Income

Types of Businesses Service Business Disney Entertainment Product Disney Entertainment Delta Air Lines Transportation Marriott Hotels Hospitality and lodging Merrill Lynch Financial advice Sprint Telecommunication

Financial Statements for Service Companies There is no inventory and thus no inventoriable costs. The income statement does not include cost of goods sold. Revenues – Expenses = Operating income

Service, Merchandising, and Manufacturing Companies Provides intangible services, rather than tangible products Merchandising resells products previously bought from suppliers

Service, Merchandising, and Manufacturing Companies Manufacturing Company: uses labor, plant, and equipment to convert raw materials into finished products Materials inventory Work in process inventory Finished goods inventory

Manufacturing Company Example Kendall Manufacturing Company: Beginning and ending work-in-process inventories were $20,000 and $18,000. Direct materials used were $70,000. Direct labor was $100,000. Manufacturing overhead incurred was $150,000.

Manufacturing Company Example What is the cost of goods manufactured? Beginning work in process $ 20,000 Direct labor $100,000 Direct materials 70,000 Mfg. overhead 150,000 320,000 Ending work in process (18,000) Cost of goods manufactured $322,000

Manufacturing Company Example Kendall Manufacturing Company’s beginning finished goods inventory was $60,000 and its ending finished goods inventory was $55,000. How much is the cost of goods sold?

Manufacturing Company Example Beg. finished goods inventory $ 60,000 + Cost of goods manufactured 322,000 = Cost of goods available for sale $382,000 – Ending finished goods 55,000 = Cost of goods sold $327,000

Manufacturing Company Example Kendall Manufacturing Company had sales of $627,000 for the period. How much is the gross margin? Sales $627,000 – Cost of goods sold 327,000 = Gross margin $300,000

Manufacturing Company Example Kendall Manufacturing Company had operating expenses as follows: $80,000 Sales salaries 10,000 Delivery expense 30,000 Administrative expenses $120,000 Total What is Kendall’s operating income?

Manufacturing Company Example Gross margin $300,000 – Operating expenses 120,000 = Operating income $180,000

Flow of Costs through a Manufacturer’s Accounts Direct Materials Inventory Beginning inventory Purchases and freight-in Direct materials available for use Ending inventory Direct materials used Work in Process Inventory Beginning inventory Direct materials used Direct labor Manufacturing overhead Total manufacturing costs to account for Ending inventory Cost of goods manufactured

Flow of Costs through a Manufacturer’s Accounts Finished Goods Inventory Beginning inventory Cost of goods manufactured Cost of goods available for sale Ending inventory Cost of goods sold

Manufacturing Cost Terms

COST EXPENSE ASSET EXPENSE Payroll Check EXPENSE

Managerial Cost Concepts Manufacturing Costs Manufacturing consists of activities to convert raw materials into finished goods. In contrast, a merchandising firm sells goods in the form in which they were bought. Categories of manufacturing costs include: LO 3 – Define the three classes of manufacturing costs.

Komponen Kos Produk Overhead Material (bahan baku) Tenaga kerja langsung

Konsep kos sebagai bahan olah akuntansi Aliran fisik Konsep kos sebagai bahan olah akuntansi Penyimbolan elemen Bahan baku Mesin Tenaga kerja K a s Utang Produk Pengukuran elemen untuk data dasar kos kos kos kos kos kos Sistem informasi Rp750.000 Rp3.500.000 Rp1.500.000 Rp7.500.000 Rp2.500.000 Rp1.750.000

Manufacturing Costs Materials Raw Materials Basic materials used in manufacturing Direct Materials Raw materials that can be physically and directly associated with the finished product LO 3 Define the three classes of manufacturing costs.

Manufacturing Costs Materials Indirect Materials Raw materials that cannot be easily associated with the finished product Not physically part of the finished product or they are an insignificant part of finished product in terms of cost Considered part of manufacturing overhead LO 3 Define the three classes of manufacturing costs.

Manufacturing Costs Labor Direct Labor Work of factory employees that can be physically and directly associated with converting raw materials into finished goods Indirect Labor Work of factory employees that has no physical association with the finished product or for which it is impractical to trace to the goods produced LO 3 Define the three classes of manufacturing costs.

Manufacturing Overhead Manufacturing Costs Manufacturing Overhead Costs that are indirectly associated with manufacturing the product Includes all manufacturing costs except direct materials and direct labor LO 3 Define the three classes of manufacturing costs.

Flow of Manufacturing Costs Materials Work in Process Finished Goods Materials Purchased DM DM Cost of Goods Sold Wages Payable Factory Overhead Total Wages DM Direct materials used in production

Flow of Manufacturing Costs Materials Work in Process Finished Goods DM Materials Purchased DM IM IM Cost of Goods Sold Wages Payable Factory Overhead Total Wages IM Indirect materials used in production

Flow of Manufacturing Costs Materials Work in Process Finished Goods Materials Purchased DM DM DL IM Cost of Goods Sold Wages Payable Factory Overhead IM Total Wages DL DL Direct labor used in production

Flow of Manufacturing Costs Materials Work in Process Finished Goods DM Materials Purchased DM DL IM Cost of Goods Sold Wages Payable Factory Overhead Total Wages DL IM IL IL IL Indirect labor used in production

Flow of Manufacturing Costs Materials Work in Process Finished Goods DM Materials Purchased DM DL IM Cost of Goods Sold Wages Payable Factory Overhead Total Wages DL IM IL IL OFOH OFOH Other factory overhead costs incurred during production

Flow of Manufacturing Costs Materials Work in Process Finished Goods DM Materials Purchased DM DL IM FOHA Cost of Goods Sold Wages Payable Factory Overhead DL IM Total Wages FOHA Based on predetermined overhead rate IL IL OFOH FOHA Factory overhead applied to work in process

Flow of Manufacturing Costs Materials Work in Process Finished Goods DM COGM COGM Materials Purchased DM DL IM FOHA Cost of Goods Sold Wages Payable Factory Overhead DL IM Total Wages FOHA IL IL OFOH COGM Cost of goods manufactured and transferred to finished goods

Flow of Manufacturing Costs Materials Work in Process Finished Goods Materials Purchased DM DM COGM COGM SOLD SOLD DL IM FOHA Cost of Goods Sold Wages Payable Factory Overhead IM Total Wages DL FOHA IL IL OFOH SOLD Finished goods sold

Review Question Which of the following is not an element of manufacturing overhead?: a. Sales manager’s salary. b. Plant manager’s salary. c. Factory repairman’s wages. d. Product inspector’s salary. LO 3 Define the three classes of manufacturing costs.

Penggolongan Biaya Objek Pengeluaran Fungsi Pokok dalam Perusahaan Hubungan Biaya dengan Sesuatu yang Dibiayai Perilaku Biaya dengan Perubahan Volume

Menurut Objek Pengeluaran Dalam cara penggolongan ini, nama objek pengeluaran merupakan dasar penggolongan biaya. Misalkan nama objek pengeluaran adalah Bahan Bakar, maka semua pengeluaran yang berhubungan dengan bahan bakar disebut “ Biaya Bahan Bakar “

Menurut Fungsi Pokok Perusahaan Dalam Perusahaan terdapat 3 fungsi pokok, yaitu Produksi, Pemasaran dan Administrasi & Umum Biaya Produksi merupakan biaya yang terjadi untuk mengolah bahan baku menjadi barang jadi Biaya Pemasaran Merupakan biaya yang terjadi untuk melaksanakan pemasaran Biaya Administrasi & Umum Merupakan biaya untuk mengkoordinasi kegiatan produksi & pemasaran

Klasifikasi Kos Fungsional Tenaga Kerja Langsung Produksi Operasi Total Komersial Overhead Bahan Baku + = Pemasaran Taklangsung Lainnya Bahan Penolong Administratif/Umum Utama Konversi Perioda (non pemanufakturan)

Klasifikasi Umum Biaya Biaya Produksi: BB (langsung -tidak langsung) BTK (langsung- tidak langsung) BOP Biaya Non Produksi: Biaya pemasaran atau penjualan Biaya administrasi

Metode Penentuan Biaya Produksi Full Costing Merupakan metode penentuan kos produksi yang memperhitungkan semua unsur biaya produksi ke dalam kos produksi ditambah biaya non produksi BBB + BTKL + BOP Fix + BOP Var Kos Non Produksi + Kos Produksi B. Adm Umum + B. Pemasaran

Metode Penentuan Biaya Produksi Variable Costing Merupakan metode penentuan kos produksi yang hanya memperhitungkan biaya produksi yang berperilaku variabel ke dalam kos produksi B. AD UM VAR BOP FIX B. MARK FIX BTKL B. AD UM FIX B. MARK VAR BBB BOP VAR

Biaya pemasaran atau penjualan semua biaya yang diperlukan untuk menangani pesanan konsumen dan memperoleh produk atau jasa untuk disampaikan kepada konsumen. contoh : pengiklanan, pengiriman, perjalanan dalam rangka penjualan, komisi penjualan, gaji untuk bagian penjualan, biaya penyimpanan gudang Biaya administrasi pengeluaran eksekutif , organisasional dan klerikal yang berkaitan dengan manajemen umum organisasi. contoh : gaji eksekutif, akuntan umum, kesekretariatan, humas

Klasifikasi biaya untuk pembebanan Biaya ke objek biaya: Biaya Langsung Biaya Tidak Langsung

Menurut Hubungan Biaya dengan Sesuatu yg Dibiayai Biaya Langsung (Direct Cost) Adalah biaya yang terjadi, yang penyebab satu-satunya adalah karena adanya sesuatu yang dibiayai. Biaya Langsung terdiri dari Biaya Bahan Baku (BBB) dan Biaya Tenaga Kerja Langsung (BTKL)

Menurut Perilaku Biaya dengan Perubahan Volume Biaya Variabel, adalah biaya yang jumlah totalnya berubah sebanding dengan perubahan volume kegiatan Biaya Semi Variabel, adalah biaya yang berubah tidak sebanding dengan perubahan volume kegiatan. Pada biaya ini mengandung unsur biaya tetap dan biaya variabel

Menurut Perilaku Biaya dengan Perubahan Volume Biaya Tetap, adalah biaya yang jumlah totalnya tetap dalam kisar volume kegiatan tertentu Biaya Semi Fixed, adalah biaya yang tetap untuk tingkat volume kegiatan tertentu dan berubah dengan jumlah yang konstan pada volume kegiatan produksi tertentu

Perbedaan biaya antara dua alternatif Klasifikasi biaya untuk pengambilan keputusan: Biaya diferensial Biaya kesempatan Biaya tertanam Biaya Diferensial /Inkremental-Dekremental: Perbedaan biaya antara dua alternatif Konsep biaya marginal dan pendapatan marginal: Biaya marginal: biaya yang digunakan untuk menghasilkan 1 unit lebih banyak Pendapatan marginal: pendapatan yang diperoleh dari penjualan 1 unit lebih banyak

Biaya Kesempatan (Opurtunity cost): manfaat potensial yang akan hilang bila salah satu alternatif telah dipilih dari sejumlah alternatif yang tersedia. Biaya Tertanam (sunk cost): biaya yang telah terjadi dan tidak dapat diubah oleh keputusan apapun yang dibuat saat ini ataupun masa yang akan datang.

Product Versus Period Costs Product Costs What are product costs? They are the costs to produce (or purchase) tangible products intended for sale.

Product Versus Period Costs Product Costs Components: direct material cost, direct labor cost, and manufacturing overhead A necessary and integral part of producing the product Recorded as inventory when incurred Not an expense until the finished goods inventory is sold then cost of goods sold LO 4 Distinguish between product and period costs.

Product Costs There are two types of product costs: Full Inventoriable

External Reporting Inventoriable product costs Period costs

Inventoriable Product Costs For external reporting, merchandisers’ inventoriable product costs include only costs that are incurred in the purchase of goods. Inventoriable costs are an asset. Period costs flow as expenses directly to the income statement.

Inventoriable Product Costs For external reporting, manufacturers’ inventoriable product costs include raw materials plus all other costs incurred in the manufacturing process. Inventoriable product costs are incurred only in the third element of the value chain. Costs incurred in other elements of the value chain are period costs.

Inventoriable Product Costs Direct Materials Direct Labor Indirect Labor Indirect Materials Other Manufacturing Overhead

Inventoriable Product Costs Direct Materials Direct Labor Prime Costs = Direct Materials + Direct Labor

The cost of materials that are an integral part of the product. Direct Materials The cost of labor directly involved in converting material into the product. Product Costs Direct Labor Manufacturing costs other than direct materials and direct labor. Factory Overhead

Product Versus Period Costs Matched with revenue of a specific time period and charged to expense as incurred Non-manufacturing costs Deducted from revenues in period incurred to determine net income Includes all selling and administrative expenses LO 4 Distinguish between product and period costs.

Product Versus Period Costs LO 4 Distinguish between product costs and period costs.

EXAMPLES OF PERIOD COSTS SELLING EXPENSES Advertising expenses Sales salaries expenses Commission expenses

ADMINISTATIVE EXPENSES EXAMPLES OF PERIOD COSTS ADMINISTATIVE EXPENSES Office salaries expenses Office supplies expenses Depreciation expense— office buildings and office equipment

For the Month Ended December 31, 2006 Goodwell Printers Income Statement For the Month Ended December 31, 2006 Sales $28,000 Cost of goods sold 20,150 Gross profit $ 7,850 Selling and admin. expenses: Sales salaries expense $2,000 Office salaries expense 1,500 Total selling and admin. expenses 3,500 Income from operations $ 4,350

Cost Objects, Direct Costs, and Indirect Costs Cost objects are anything for which a separate measurement of costs is desired. Cost drivers are any factors that affect cost.

Cost Objects, Direct Costs, and Indirect Costs What are examples of cost objects? individual products alternative marketing strategies geographic segments of the business departments

Cost Objects, Direct Costs, and Indirect Costs What are direct costs? Direct costs are those costs that can be specifically traced to the cost object. What are indirect costs? Indirect costs are costs that cannot be specifically traced to the cost object.

Manufacturing Costs in Financial Statements Income Statement The income statement for a manufacturer is similar to that of a merchandiser except for the cost of goods sold section. CGS LO 5 Explain the difference between a merchandising and a manufacturing income statement.

Isi Statemen Laba-Rugi Penjualan Potongan penjualan Kembalian dan keringanan penjualan Penjualan bersih Kos barang terjual: Sediaan barang, awal Pembelian Potongan pembelian Kembalian dan keringanan Pembelian bersih Kos pengangkutan Kos barang tersedia dijual Sediaan barang, akhir Laba kotor penjualan Biaya operasi: Biaya penjualan Biaya administratif dan umum Laba operasi 152.300 2.700 2.000 148.600 4.200 1.500 33.700 152.800 186.500 36.000 38.850 25.150 255.500 3.500 252.000 150.500 101.500 64.000 37.500

Cost of Goods Sold Components Merchandiser versus Manufacturer LO 5 Explain the difference between a merchandising and a manufacturing income statement.

Cost of Goods Sold Section of the Income Statement LO 5 Explain the difference between a merchandising and a manufacturing income statement.

Determining the Cost of Goods Manufactured Work in Process – partially completed units of product Total Manufacturing Costs – sum of direct material costs, direct labor costs, and manufacturing overhead; all incurred in the current period LO 6 Indicate how cost of goods manufactured is determined.

LO 6 Indicate how cost of goods manufactured is determined.

Contoh Isi Laporan Kos Produksi Perusahaan Tegel Cap GAJAH Lampiran A: Laporan Kos Produksi untuk tahun berakhir 31 Desember 2001 Sediaan tegel dalam proses, 1 Januari Pemakaian semen dan pasir: Sediaan semen dan pasir, 1 Januari Pembelian semen dan pasir Bahan baku tersedia diproses Sediaan semen dan pasir, 31 Desember Bahan baku yg dipakai Tenaga kerja langsung Overhead pabrik Gaji pengawas produksi Depresiasi bangungan-Pabrik Depresiasi mesin cetak dan pres Pemakaian bahan penolong Listrik dan air Asuransi-Pabrik Kos produksi masuk proses Sediaan tegel dalam proses, 31 Desember Kos barang manufakturan Rp 4.200.000 13.400.000 Rp17.600.000 3.800.000 Rp 2.140.000 850.000 1.500.000 840.000 357.000 152.000 235.000 Rp 2.450.000 13.800.000 7.490.000 6.074.000 Rp29.814.000 2.100.000 Rp27.714.000

Balance Sheet - Inventories Manufacturing Company May have three inventories: Raw Materials Work in Process Finished Goods Merchandising Company One category of inventory: Merchandise Inventory LO 7 Explain the difference between a merchandising and a manufacturing balance sheet.

Balance Sheet - Inventories LO 7 Explain the difference between a merchandising and a manufacturing balance sheet

Match Terms & Definitions The return that could not be realized from the best forgone alternative use of a resource Cost Opportunity Cost A cost charged against revenue Expense Costs not directly related to a cost object Cost Object Any item for which a manager wants to measure a cost Direct Cost Costs directly related to a cost object Indirect Cost A sacrifice of resources

Review Question Direct Materials are a: Product Manufacturing Period Cost Overhead Cost a. Yes Yes No b. Yes No No c. Yes Yes Yes d. No No No

Indicate whether each of the following costs of an automobile manufacturer would be classified as direct materials, direct labor, or manufacturing overhead. ______ a. Windshield ______ b. Engine ______ c. Wages of assembly line worker ______ d. Depreciation of factory machinery ______ e. Factory machinery lubricants ______ f. Tires ______ g. Steering wheel ______ h. Salary of painting supervisor DM DL MO

Identify whether each of the following costs should be classified as product costs or period costs. ____________ a. Manufacturing overhead ____________ b. Selling expenses ____________ c. Administrative expenses ____________ d. Advertising expense ____________ e. Direct labor ____________ f. Direct material Product Period

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