:

- ) ( : : // //

Financial Accounting

Managerial Accounting

External Reporting

Internal Reporting

* .
.
: stnanetat iaiananiF
.1 .
.2 .
.3 ( ) .
.4 .
*
.

) : eensann hneena iaianani tn a maceIanntFtnc

.
:
055,555

ataF Rasanaa

()225,555

deFi ed oeenF Fetn

205,555

oceFF scedti

()125,555

( )

105,555

( ) tai scedti

 :
:

( ) .

+ ( )

- ( )

:
. .
. .
. .

* :
.1 .
.2 .
.3 .
.4
.

LCM Lower of cost or market .

)2 ( )
) : Statement of financial position ( Balance sheet
, :
.1 ( ) .
.2 ( ) .
.3 ( ) .

 :
( ) 2552/12/31

x
x
x

x
x

/ /

( )

Prepaid expenses

Current Liabilities

x
x

( )
Notes payable

Long-Term Liabilities

() Retained earnings

*
.
* : .
* : .
.
.
* : .
* : .


.
( ) Cost classification
:
.1 Functional classification
.
() ( ) .
() ( ) .
() ( ) .
.2 . :
() Direct costs
can be easily traced to a specific cost object in an economic manger.

.
.
* ( , , , , ) .
() Indirect costs
can not be easily traced to a specific cost object in an economic manger.
.3 Volume of production
() Variable costs

.
( ) .
: .
All direct costs are variable costs.
() Fixed costs
.
( ) .
( . ) Capacity costs -

 - ) ( : : // //

* :
.0 ) Accumulation of costs ( Collecting
.0 ( Allocation of costs ( Distribution
.4 : :

/ Product / Inventoriable costs

(
) .
Costs become expenses when the goods are sold in the form of cost of goods sold .

.
:
( ) .

( ) assanFa .

sacten eeFiF
.
.
:
.

* :
. . Actual costs and standard costs
stFiecteat eeFiF
.

.
. . hccatasani eeFiF Ratasani eeFiF ann

.
.
Controllable costs and uncontrollable costs

.


* : Full costing theory

.

.

Schedule of costs of goods manufactured
00555

Direct materials used

10555

) Direct labour ( wages

Prime cost

24555

Factory over head

6500

4500

Variable factory over head

Fixed factory over head

4055 .

11555
105000
0555
111000
)(7000
104000

Manufacturing costs incurred during the period
+ work-in process beginning
Manufacturing costs to account for
work-in process ending : .

Cost of goods manufactured

* :
11000

Direct materials beginning

73000

+ Purchases of Direct materials

84000

Direct materials available for use

()0555
00555

Direct materials ending : .

:
.1 .2 . .3 . .4 . .
.0 .
:
.1 .2 . .3 . .


Income statement for a manufacturing company
Sales

210000

Finished goods, beginning

22555

104000

( ) Cost of goods manufactured

126000

Cost of goods available for sale

)(18000

( ) Finished goods, ending

)(108000

( ) Cost of goods sold

102000

Gross profit / Margin

()05555

( )

Net profit

22555

* : Variable costing theory

.


.
:

355555

( +

()105555

) : .
/ Marginal contribution

145555

35555

45555

( )

25555

()25555
05555

*
.
* ( ) : .

.

 - ) 3 ( : : 1432/11/0 2511/15/10

Cost-Volume-Profit Relationship

.1 :
Lump sum
:
-

.2 :
:
-

 :
25 Variable cost per unit
45 Selling price per unit
30000 )Fixed costs (FC
:
:
:
: Breakeven point
.
( )1 =Breakeven in unites

Fixed costs

Selling price per unit

Variable cost per unit

* .
: = Contribution per unit
=

1500

: 1500 .
( )2 = Breakeven in dollars
= 1500
=

Fixed costs

Contribution ratio

60,000 = 40

30,000
) 0.5 ( 50%

= 60,000

( )3 ( ) :
= 1055

45

= 1055

05,555

25 =

( )35,555

35,555

( )35,555

* .
.

.

 2555 :
= ( 2555 1055 )

( 25 ) = 15,555

2555 ( ) :
45

= 2555

= 2555

05,555

25 =

( )45,555

45,555

( )35,555
15,555

* : = ( 055 )

( 15,555 = ) 25

:
15555 .

+ Target

=
=

10,000 + 30,000
20

40,000

20

2555

:
35,555 .

+ Target

=
=

30,000 + 30,000
20

60,000

20

3555

( ) :
45

= 3555

= 3555

125,555

25 =

( )05,555

05,555

( )35,555

35,555

( 30,000 ) = 1055
( 20 )

10

 :
Suppose that a two-product company had the following budget:
Total

160,000

40,000

120,000

$ 1000,000

$ 400,000

$ 600,000

) ( 600,000

) ( 120,000

) ( 480,000

400,000

280,000

120,000

Sales in units
Sales revenue
( Sales price is $5 and $10 per unit of products
) A and B respectively
( $0 $15 A B
)
Variable costs @ $4 and $3
$4 $3 A
B
) ( @ = price per unit
Contribution
Fixed costs

) ( 300,000

Net profit

100,000

: A . B
: A . B
?Required: What would be the breakeven point
Average contribution per unit =

Breakeven in units A = B

( 400,000 )
( 160,000 )

= $2.0

( 300,000 )

( 2.5 )

= 125,555 .
125,555 .
125,555 A 45,555 B 12 4
4 3 = A 1 = B . 4
= Breakeven for product A

( 120,000 )
( 4 )

( 3 ) A

= 25,555 .
= Breakeven for product B

( 120,000 )
( 4 )

= 35,555 .

11

( 1 ) B

 :
:
-

1.0

455

%35

.320
:
You are given the following data for a given product:
- Sales price per unit 1.8
- Variable cost per unit 1.0
- Fixed costs 400
- Tax rate 30%
- Net profit after taxation 328.
?Required: compute the breakeven point
:
=

328

= 400

0.7

( 5.0 . ) ) 5.3 ( %35-1

= + +
+ $455 + X 1.0$ = X 1.8$
400 + 455 = X 1.0$ - X 1.8$

328
0.7

( X )

000 = X 0.8
= X

868
0.8

= 1500 .

:
= + +
1203

= 1500

455 +

468 +

12

 - ) 4 ( : : 1432/11/24 2511/15/22

( .. ) 3
( ) :
= 055

( 05 ) =

= 055

20,555

( 25 ) =

()15,555

10,555

()0,555

0,555
()2,055

%45

4,255

: :
-

05

25

0555

%45

4255

:
:
= + +
05 = 25 + 0555 +

( ) 5.0 = %45 - 1

0525 - = 0555 + 0555

= 055 = 35 / 10555

13

Flexible Budgets and Standards

(: )1
:
-1 Actual / historical costs
-2 / / Standard costs

:
.1 : Static budget
.
.2 : Flexible budget
.

(: )2
:
-1 ( ) ) F ( Favored variance
-2 ( ) ) U ( unfavored variance
( ) Correction Actions .

: Analysis level 1
$1455

= Actual operating income

)$ 112,555( = Budgeted operating income

$115,055

= operating income variance

( ) U

:
,
.

14

 : Analysis level 2

units
Sales revenue

Variable costs
/
Contribution margin
Fixed costs

Operating income

Actual results

Static budget

Variance

15,555

12,555

U 2555

$720,000

$840,000

U $120,000

$02

$05

)($546,000

)($552,000

F $0455

$04.00

$40

$173,400

$288,000

U $114,600

)($172,000

)($176,000

F $4000

$1400

$112,000

U $110,600

* .
:
.1 125,555 ( ) . U
.2 0455 ( ) . F
.3 4555 ( ) . F
115,055 (
) . U
* :
.
* :

.

:
Actual budget . Actual results

15

 : Analysis level 2

units
Sales
revenue

Variable costs

Actual results

Flexible budget

Static budget

10,000

10,000

12,000

02,555

055,555

()040,055

()405,555

045,555

()1-2

()2-3

Flexible

Sales

budget

volume

variance

Variance

U 2000

F 25,555

U 145,555

* 05

()002,555

U 00,055

F 22,555

* 40

Contribution

103,455

200,555

245,555

U 00,055

U 48,000

margin

Fixed costs

Operating income

()102,555

()100,555

()100,555

F 4555

1455

0455

112,555

U 02,055

U 40,555

* =

= / = 05 = 12,555 / 045,555 = 05

055,555 = 15,555

* =

= / = 40 =12,555 / 002,555 = 40

405,555 = 15,555

: ( ) .
= U 115,055 + U 02,055 U 40,555
:
.1 .2 . .

.3 .

16

 - ) 5 ( : : 1432/12/2 2511/15/29

* :
Sales volume variance = ( flexible budget units static budget units ) X budget contribution margin per
unit
= ( ) X

10,000 .
= ( X ) 12,555 15,555

12,000 .
288,000 .
12,000 .

= U 40,555- = 24 X 2555-
: Analysis level 4
Detailed analysis of variances
Direct costs variances :
.1 . Direct materials variances
.2 . Direct labor variances
: Direct material variances
3

Flexible budget

Flexible budget

incurred

SQ X SP

AQ X SP

AQ X AP

40,000 X $5

50,000 X $5

50,000 X $5.4

=$200,000

= $250,000

= $270,000

AQ = Actual quantity , AP= Actual price , SP= Standard prise , SQ= Standard quantity
.
Based on actual output achieved.
* U $25,555 = 2 - 1 = Price variance

( 205,555 .. 205,555

* U $05,555 = 3 - 2 = Efficiency or Quantity variance

)

* U $05,555 = 3 - 1 = Flexible budget variance

17

 : Direct labor variance

3

Flexible budget

Flexible budget

incurred

SH X SP

AH X SP

AH X AP

20,000 X $8

22,000 X $8

22,000 X $7.8

=$160,000

= $176,000

= $171,600

AH = Actual Hours , AP= Actual price , SP= Standard prise , SH= Standard Hours
.
* F $4,455 = 2 - 1 = Price variance

( 101,055 ) 100,555

* U $10,555 = 3 - 2 = Efficiency or Quantity variance

105,555 ) 100,555

* U $11,055 = 3 - 1 = Flexible budget variance

18

 :
Consider the following data for a particular company::
Actual unit selling price

$75

Units sold

10,800

Budget or standard amounts per unit:

Selling price

70

Direct material (4 pounds @ $5)

20

Direct labor (2 hrs @ $8)

16

Variable FO (2 hrs @ $1.5)

Variable selling and administrative costs

Budgeted fixed FO

96,000

Actual fixed selling and administrative costs

80,000

Actual fixed FO

92,000

Other actual data:

Actual variable selling and administrative costs

73,000

Direct material costs

$270,000

Pounds of input

50,000

Price per pound

$5.4

Direct labor costs

$171,600

Hours of input

22,000

Labor price per hour

$7.8

Variable FO

$32,000

Moreover the static budget was a follows:

Units of output

12,000

Sales revenue

$840,000

Variable costs

(552,000)

Contribution margin

= 288,000

Fixed costs

(176,000)

Operating income

112,0000

You are required to:

1. Prepare the performance report for the company showing:
A. The flexible budget variance. B. The sales volume variance.
2. Compute the price and efficiency variances for both DM and DL.
3. Comment on the performance of the company indicating the difference between efficiency and
effectiveness.
:
: .1
. .

. .

.2
.3

19

:
Performance report .1
0

)2-3(

)1-2(

Sales

Flexible

volume

budget

Variance

variance

U 1255

U 04,555

F 04,555

F 00,255

U 42,055

Static budget

Flexible budget

Actual results

12,000

10,800

10,800

units

015,555

Sales

75x10800

revenue

045,555

000,555

70x12000

)002,555(

)420,055(
46x10800

)040,055(

Variable costs
/

U 20,055

F 4,255

200,555

202,255

203,455

Contribution
margin

F 4555

)100,555(

)100,555(

)102,555(

U 20,055

F 8,200

112,555

03,255

21,455

20

Fixed costs

Operating income

 .2
Compute the price and efficiency variances for both DM and DL
: Direct material variances
3

Flexible budget

Flexible budget

incurred

SQ X SP

AQ X SP

AQ X AP

(10,800 X 4) X 5

50,000 X 5

50,000 X 5.4

= 43,200 X 5 = $216,000

= $250,000

= $270,000

* U $25,555 = 2 - 1 = Price variance

* U $34,555 = 3 - 2 = Efficiency or Quantity variance
* U $04,555 = 3 - 1 = Flexible budget variance

: Direct labor variance

3

Flexible budget

Flexible budget

incurred

SH X SP

AH X SP

AH X AP

(10,800 X 2 ) X 8

22,000 X 8

22,000 X 7.8

= $172,800

= $176,000

= $171,600

* F $4455 = 2 - 1 = Price variance

* U $3255 = 3 - 2 = Efficiency or Quantity variance
* F $1255 = 3 - 1 = Flexible budget variance

: :
,
.
.
.
12,555
15,055 . ,
05,555 43,255 ( 15,055 4 X )
.

21

 - ) 0 ( : : 1432/12/10 2511/11/12

Relevant costs, pricing, and decision making
: :
.1 : Relevant costs .
.2 : Irrelevant costs .
:
: Historical costs
. ( . ) Sunk costs
: Variable costs
.
: Relevant costs :
.1 . Future costs
.2 . It will differ between alternatives

* :
:
.
.
:
.1 .2 . .3 . .
.4 .0 . .
.
( ) :
.1 .
.2 .
.3 .

22

* :
.1 : Avoidable costs
.
.2 : Unavoidable costs
.

( )1 : The special order

Z :

Per unit

Total

$10

$ 800,000

8.125

)(650,000

1.875

150,000

1.500

120,000

0.375

30,000

Sales 80,000 pairs @ $10

15
Manufacturing costs of goods sold

) ( They are $ 400,000 variable and $ 250,000 fixed costs
455,555 205,555
Gross margin
Selling and administrative expenses

) ( $ 80,000 fixes costs and $ 40,000 -VC- shipping expenses
05,555 45,555 ( )
Operating income

Y 25,555 0.055$ . 105,555 $

. .
0.055 $
. ) 0.120 $

23

 (: )1
( )
With special order

Without special order

Difference

Total

Total

Per unit

150,000

950,000

$800,000

$10

)(100,000

)(500,000

)(400,000

)(40,000

)(40,000

50,000

410,000

360,000

)(250,000

)(250,000

3.125

)(80,000

)(80.000

50,000

80,000

30,000

0.375

Sales
Variable costs:

1.Manufacturing costs

)(400,000/80,000

0.5
)(40,000/80,000

4.5
)(360,000/80,000

2.Selling costs
Contribution margin
Fixed costs :
1.Manufacturing costs

2.Administrative and Selling costs

Operating income

:
= 0.0 X 25,555

= 105,555

= 0 X 20,000

= ()155,555
05,555

:
:

0.0

( )0

2.0
25,555 X
= $05,555

24

 - ) 0 ( : : 1433/1/1 2511/11/20

Contribution per unit of constraining factor

:
B

15

10

Selling price

)(9

)(7

Variable costs

Contribution

) 40% ( 6/15

) 30% ( 3/10

Contribution ratio

B A 1555
, 3 A B .
:

:
B

) 6 ( 1x6

) 9 ( 3x3

6000

9000

Units per hour

Contribution per hour

Total contribution for 1000 hours
1555

25

 ( )2 :
15,555 . :
Total

Spouts

Onions

Lettuces

Carrots

127,000

29,500

16,750

56,250

24,500

Sales

30,000

8,000

5,000

10,000

7,000

Direct Martial

40,000

6,000

3,000

25,000

6,000

Direct Labor

10,000

1,500

750

6,250

1,500

20,000

3,000

1,500

12,500

3,000

100,000

18,500

10,250

53,750

17,500

Total cost

27,000

11,000

6,500

2,500

7,000

Profit

10,000

2,000

1,000

5,000

2,000

Variable overhead

Fixed overhead

Area allocated square meter

.1 ... .
.2 %20 .
.3 25,555 %05 .
.
. % 25 .
.
:
:
.1 :
Total

Spouts

Onions

Lettuces

Carrots

127,000

29,500

16,750

56,250

24,500

Sales

)(30,000

)(8,000

)(5,000

)(10,000

)(7,000

Direct Martial

)(40,000

)(6,000

)(3,000

)(25,000

)(6,000

Direct Labor

10,000

1,500

750

6,250

1,500

47,000

14,000

8,000

15,000

10,000

10,000

2,000

1,000

5,000

2,000

7$

8$

3$

5$

Variable overhead

Contribution
/
Area allocated square meter

Contribution per square meter

* ( )

26

 .2 :
Crops Ranked
Total

Contribution per

Area tobe

Area Now

contribution

square meter

cultivated

cultivated

9,600

8$

1,200

1,000

Onions

16,800

7$

2,400

2,000

Spouts

12,000

5$

2,400

2,000

Carrots

12,000

3$

5,000

Lettuces

4,000
15,555

50,400

10,000

10,000

)(20,000

Total
Fixed costs
Profit planned

30,400

.3 :

Sales
Direct Martial

Direct Labor

Variable overhead

Contribution

Onions

Spouts

Carrots

Lettuces

Total

20,100

35,400

29,400

45,000

129,900

)(6,000

)(9,600

)(8,400

)(8,000

)(32,000

)(3,600

)(7,200

)(7,200

)(20,000

)(38,000

)(900

)(1,800

)(1,800

)(5000

)(9,500

9,600

16,800

12,000

12,000

50,400

Fixed costs

)(20,000

Profit

30,400

* %25 . 5.0 . %25

27

 ( )
Make or buy and idle facilities
: :
35

15,555

1.55

15,555

0.55

05,555

4.55

45,555

0.55

05,555

10.55

105,555

10 .
: :
.1 25,555 .
.2 .
:

15,555

05,555

45,555

25,555

10

10

105,555

105,555

15,555

:

. 15,555

. 25,555 35,555
.
** .

28

 - ) 0 ( : : 1433/1/10 2511/12/15

:
* .
* =
( )

( )3 :
125,555
4 . ( ) , 4555
4 .
05,555 00,555 ,
05,555 155,555 ( . 155,555

) .
:
:
:

155,555 .

.
4

325,555

224,555

4 X 05,555

4 X 00,555

( )

()4555

4555

05,555

()05,555

325,555

205,555

45,555

( )

. 45,555

29

20,555

 Capital Budgeting
,
.
:
:
.1 .
.2 .
.3 .

: Accounting rate of return

=

= %21.3

: %21.3 ,

.
:
Time value of
. money
: Payback period
) Annual net cash flow
= ( ) (
)
: 25,555 . 0555
:
:
=

= 4

:
.1 .
.2 .

30

) No uniform cash flows a cumulated

2555

2555

1055

3055

1055

0355

1255

0055

1555

0055

055

0355

. 4055
:
= 2 +

= 2.40 .

( 3055 4055 = 055 1055 ) ..

31

 - ) 9 ( : : 1433/1/22 2511/12/17

:
) The bailout factor a better approach to payback
:
.1 .
.2 :
:
= ( ) 5
)

: () 155,555 () , 105,555
15 , () ( ) , 25,555 ()
. 45,555
() 05,555 , 15,555 .
() 05,555 , 25,555 .
: :
.1 .
.2 .
:
.1 :
() =

() =

= 0

= 3.00

:
() .

32

 .2 :
() :

25,555

05,555

25,555

45,555

05,555

155,555

() .

() :

45,555

05,555

125,555

05,555

05,555

145,555

125,555

45,555

105,555

() .
: () .

) :
:
.1 .
.2 .
: 3021 0
, . , 1555
. %0
:
.1 .
.2 .
:
.1 :
= X
= 3223 = 3.223 X 1555
-

( )

5
%8

( ) 3021
252

: ,
.

33

 :

155,555

)(60,000

40,000

)(15,000

25,000
)(9,000

16,000

)(4,800

%35

11,200

( , )
:
= + = 25,255 = 2,555 + 11,255
.
:
= , 40,555 = 0 ..
= 2555 = 0 / 40555

* :
=

) (

=
=

= 758

= %12.0

: %12.0 . %0

* Required rate of return

) (RRR . Discount rate
. Opportunity cost
.
.

34

 :
.2 )Internal rate of return (IRR

.
.

.
: (
) .
.
:
= F

F = Factor

= 3.021

0 . %15
= %15
:
%15 . %0

35