Post on 17-Jan-2016
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Controlling 2iBaan ERP 5.0c
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iBaan ERP Course Objective I
TheThe objective of this course is to objective of this course is to
learlearn about the concepts and functionality of n about the concepts and functionality of Product Costing and Activity-based Product Costing and Activity-based Costing in iBaan ERP Finance, the Costing in iBaan ERP Finance, the link with the Cost Price Calculation of link with the Cost Price Calculation of an item, and the cost drivers inan item, and the cost drivers in
iBaan Logistics. iBaan Logistics.
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Know module contents and links to other modules
Know Cost Price Calculation procedures– Bill of Material– Cost Price Components– Operations
Know Single Dimension Budgeting set up– Distributions– Budget defaults– Performance Budget + Single Dimension Budget
Know Product Costing procedures– Iteration– Retrograde calculation– Integration with cost price calculation– Deviations
Know Activity-based Costing procedures– Bill of Activities
Finance
iBaan ERP
iBaan ERP Course Objective II
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Budget
Cost pricing
ABC
iBaan ERP - Course Content
Overview FBS/CAT
Cost Price Calculation (CPR)
Product Costing
Integration of logistic actuals (hours; cost drivers)
Activity-based Costing
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Central InvoicingCentral Invoicing
ProjectsProjects
ServiceService
Quality ManagementQuality ManagementManufacturingManufacturing
WarehousingWarehousing
General Ledger
Order ManagementOrder Management
Accounts Receivable
Budgets
Cost AccountingFinancial Statements
Fixed Assets
Cash Management
iBaan ERP Finance
Purpose: Controlling is the coordination task of budgeting, auditing, and providing information to improve business procedures in organizations.
• Budgets• Iteration• Operation Rates and Surcharges• Deviations
Accounts Payable
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FBS/CAT in relation to iBaan ERP
Finance
ACRACR
FAMFAM
Service
TSTSTSTS
Project
TSTSTSTS
Basic Data
IBDIBD
EMMEMM
COMCOM
MCSMCS
Central InvoicingLogistics IBDIBDIBDIBDTDTD
IBDIBDIIIBDIBDIBDIBD
TSTS
TPTP
GLDGLD
TITI
SLISLI
FSTFST
ACPACP
CATCAT
FBSFBS
WHWH
CMGCMG
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Cost accounting Background
1970s: Kilger and Plaut developed highly structured and detailed approach to cost control:– through standard costs and flexible budgets– basic principles:
• cost centers are focal point for cost planning, cost control, and production costing
• clear distinction between fixed and variable costs
U.S. cost systems similar to these cost systems
1980s: – use of computers makes it possible to create more frequent reports
displaying direct/indirect costs– activity based costing
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Cost accounting What is it?
Process of determining cost of producing goods and services:– manufactured goods:
• allocate direct labor and materials to cost of product• allocate overhead based on actual usage of overhead expenses
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Analyze performance of cost centers
Set direct and accurate CP rates
Improve allocation of indirect costs
Analyze profitability and product mix
Produce Management Income Statements
Break Costs into Fixed and Variable Components
Translate Business Plans into Flexible Budgets
Cost AccountingWhy?
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The business process
Create annual plans and budgets
Periodically compare budget (what I expect to do) vs allowed costs (what would it cost at standard) vs actual (what actually happened and what it actually cost)
After results possible to readjust our standard to more appropriate amounts
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ManufacturingPlan
ManufacturingPlan
Capacitycheck
Capacitycheck
ProductionPlan
ProductionPlan
SalesPlan
Sales by:Customer groupSales regionProduct group
Disaggregation
through Product Fam.
to ProductsHoursManMachineMaterial
Concept - planning cycle
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BudgetBudgetProductionPlan
ProductionPlan
Operation rate/surcharges
Operation rate/surcharges
Cost priceperitem
Cost priceperitem
Fixedtransfer
price
Fixedtransfer
priceStockvaluation
Stockvaluation
ActualActualRouting
BOMProfit
marginsProfit
margins
Evaluation
FixedandVariable
Concept - planning cycle
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BudgetBudgetProductionPlan
ProductionPlan
Operation rate/surcharges
Operation rate/surcharges
Cost priceperitem
Cost priceperitem
Fixedtransfer
price
Fixedtransfer
priceStockvaluation
Stockvaluation
ActualActualRouting
BOMProfit
marginsProfit
margins
Evaluation
FixedandVariable
Concept - planning cycle
Manufacturing
Finance
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Budget types
Multi dimension budget– Budget amounts can be based on several cost types (one ledger
account and/or one or more dimensions) together– Not performance driven– BAAN IV functionality
Single dimension budget– Performance driven budgets that are only based on ONE
dimension at the time– Usage of CAT module for allocation and iteration– Integrating surcharges/rates
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Ledger Account Dimension
Dimension Types
(1) (2) (3) (4) (5)DimensionDimensionDimensionDimensionA.
B.
E.
D.
C.
Ledger Account
Ledger Account
Dimension
Ledger Account Dimension Dimension
Dimension
Dimension Dimension
Examples:
Multi dimension budget
Defined in a horizontal way:
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Reference Unit (cost driver)
Ledger Account Ledger Account Ledger Account Ledger AccountLedger Account
DimensionReference Unit
(cost driver)
Single dimension budget
Defined in a vertical way:
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FBS/CAT functionalities
Cost Center Accounting (Budgeting)– Multi Dimension (=BaanIV functionality)– Cost Allocation (Single Dimension)
Product Costing
Activity-based Costing
Energy
Accounting Dep.
Production Dep.
Warehouse Dep.
Energy Production Dep.
Warehouse Dep.
Product A
Product B
EnergyProduction Dep.
Warehouse Dep.
Cutting
Assembling
Issuing
Receiving
Product A
Product B
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Rehearsal Controlling 1Questions
1-8
Skill Objectives
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Product CostingSingle Dimension Budgeting
HousekeepingHousekeeping Buildings/Terrain
Buildings/Terrain EnergyEnergy
AssemblyAssembly WarehouseWarehouse
Product AProduct A Product BProduct B
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Product CostingSingle Dimension Budgeting
HousekeepingHousekeeping Buildings/Terrain
Buildings/Terrain EnergyEnergy
AssemblyAssembly WarehouseWarehouse
Product AProduct A Product BProduct B
RatesRatesMachine 1Machine 1 Machine 2Machine 2
SurchargeSurcharge
Overhead surcharge Overhead surcharge
Overhead surcharge Overhead surcharge Overhead surcharge Overhead surcharge
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Material = Material = €€ 100 100
Overhead = Overhead = €€ 50 50
Labor = Labor = €€ 46 46
Total Cost = €€ 196
Cost Price Calculation
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BACKBACK FRAMEFRAMESEATSEAT
CHAIRCHAIR
FOAMFABRIC FOAMFABRIC SIDEPARTSIDEPART
TUBE
TUBE
Qty: 1
€€ 30.00
Qty: 1
€€ 10.00
Qty: 1
€€ 30.00
Qty: 1
€€ 10.00
Qty: 2
Qty: 1
€€ 5.00
Qty: 2
€€ 5.00
Material costs
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BACKBACK FRAMEFRAMESEATSEAT
CHAIRCHAIR
OperationsOperations
OperationsOperationsOperationsOperationsOperationsOperations
OperationsOperations
FOAMFABRIC FOAMFABRIC SIDEPARTSIDEPART
TUBE
TUBE
2 hr.
€€ 9.00/hr.
1 hr.
€€ 10.00/hr.
0.5 hr.
€€ 8.00/hr.
0.5 hr.
€€ 8.00/hr.
1 hr.
€€ 10.00/hr.
Overhead: $10.00 / Man HourOverhead: $10.00 / Man Hour
Operation costs
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Operations structure
OperationOperation
Task
Work center
Machine
Operation Rate
Cost Price Component
Operation Rate
Cost Price Component
Cost Price Component
Cost Price Calculation CodeCost Price Calculation Code Link to ledger accountsLink to ledger accounts
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Rates and cost price components to be used in cost price calculation– Labor– Machine– Overhead
Overhead application method– Man hours– Machine hours
Operation rates linked to operation rate code Operation rate code linked to work centers or tasks
Operation rates
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Additional costs or discounts to be included in an item’s cost price
Reporting tool to print subtotals on cost reports
Defined by calculation code – By item– By item group– By warehouse
Flexible application methods– Total costs– Selective cost price components
Surcharges 1
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Surcharge Types– Surcharge– Subtotal– Cumulative Cost Price
Surcharge Methods– Fixed Amount– % of Added Costs– % of Total Costs– % Selective (Total Costs)– % Selective (Added Costs)
Surcharges 2
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Costs associated with services provided by outside suppliers
Rates are defined by calculation code, by supplier, by task
Subcontracting rates are associated to a subcontracting work center
Subcontracting item– Represents services purchased on subcontracting purchase
order– Linked to a subcontracting rate
Subcontracting rates 1
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Subcontracting rate methods– Fixed Amount per Product—Rate is a fixed amount per unit
of product– Operation Rate—Rate X subcontracting rate factor (in
routing operation)– Man Hour Rate—Rate X estimated man hours– Machine Hour Rate—Rate X estimated machine hours
Subcontracting rates 2
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Bill of Material set upExercises
1-10
Skill Objectives
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Exercise product costing
LaptopBlack
LaptopBlack
Operations:• Assembling (2h)Operations:• Assembling (2h)
MEMCase
Qty: 1
€€ 600.00
Qty: 2
€€ 60.00
Disk
Qty: 4
€€ 130.00
Operations:• Painting (3h)• Assembling (2h)
Operations:• Painting (3h)• Assembling (2h)
MEMCase
LaptopRed
LaptopRed
Qty: 1
€€ 600.00
Qty: 1
€€ 60.00
Disk
Qty: 2
€€ 130.00
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Top-Down
Bottom-Up
Single Level
Cost Price Calculation method
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BACKBACK FRAMEFRAMESEATSEAT
CHAIRCHAIR
OperationsOperations
OperationsOperationsOperationsOperationsOperationsOperations
OperationsOperations
FOAMFABRIC FOAMFABRIC SIDEPARTSIDEPART
TUBE
TUBE
Cost Price Calculation method
Selected Item: CHAIRSelected Item: CHAIR
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BACKBACK FRAMEFRAMESEATSEAT
CHAIRCHAIR
OperationsOperations
OperationsOperationsOperationsOperationsOperationsOperations
OperationsOperations
FOAMFABRIC FOAMFABRIC SIDEPARTSIDEPART
TUBE
TUBE
Cost Price Calculation methodSingle Level
Selected Item: CHAIRSelected Item: CHAIR
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BACKBACK FRAMEFRAMESEATSEAT
CHAIRCHAIR
OperationsOperations
OperationsOperationsOperationsOperationsOperationsOperations
OperationsOperations
FOAMFABRIC FOAMFABRIC SIDEPARTSIDEPART
TUBE
TUBE
Cost Price Calculation methodTop Down
Selected Item: CHAIRSelected Item: CHAIR
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BACKBACK FRAMEFRAMESEATSEAT
CHAIRCHAIR
OperationsOperations
OperationsOperationsOperationsOperationsOperationsOperations
OperationsOperations
FOAMFABRIC FOAMFABRIC SIDEPARTSIDEPART
TUBE
TUBE
Cost Price Calculation methodBottom Up
Selected Item: FABRICSelected Item: FABRIC
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Updates the Item Costing Data
Updates are date- and time-stamped
Executed from three sessions– Calculate Cost and Valuation Prices– Actualize Cost and Valuation Prices– Item Costing Data
Updating Standard costs
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Cost PriceCost Price+ Sales Price
Surcharge @ IssueSales Price
Surcharge @ Issue=
Sales PriceSales Price
ActualSales Price
ActualSales Price
SuggestedRetail PriceSuggestedRetail Price
Or
Sales Price Calculation
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Standard Item Costing Data
Standard Item Surcharges
Standard Cost Prices by Item
Standard Cost Price Details by Item
Standard Valuation Prices
Cost Displays
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Print Standard Cost Prices by Item
Print Standard Item Costing Data
Print Cost Price Comparison by Item
Print Cost Price Calculation by Item
Print Standard Valuation Prices by Item
Print Multi-Level Cost Price Calculation
Cost Reports
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Cost Price CalculationExercise
11
Skill Objectives
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Exercise product costingCost price structure
Direct material 1240Assembling rate costs (2hrs*100) 200Warehouse surcharge (5% over dir.mat.) 62
1502300
1799
Profit margin 20%
Sales Price
Direct material 920Painting rate costs (3hrs*57) 171Assembling rate costs (2hrs*100) 200Warehouse surcharge (5% over dir.mat.) 46
1337267
1599
Profit margin 20%
Sales Price
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FBS versus CATProduct Costing
CAT
Allocation Relations
ImportActual
RetrogadeCalculation
Price Iteration
IntegrationSet up
GLD HRA FBSLogistic
FBS
AllocationResults
BudgetDistribution
BudgetCode
ReferenceUnits
Hierarchies
ReportStructures
LARelations
BudgetDefaults
IntegrationSet up
PerformanceBudget
Single Dim.Budget
CPR
Integrate Results
HRA Surcharge RatesOperationResults
Surcharge Rates Deviation
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Budget
Controlling cycle
Comparison
Reports
Actual
OperationRates
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Set up master data
Set parameters– FBS + CAT (but also CPR, HRA)
Define distributions, reference units, cost types, hierarchies, dimension types/codes
Define integration schemes– Logistic into Finance– into HRA & CPR
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Budget defaults
Budget currency
Base rate
Variability– variable part of the costs
Parent budget
Applicable ledger accounts per dimension
Source-target relation between ledger accounts– dependencies by dimension type
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Ledger Account Structure
Primary and secondary ledger accounts linked to dimensions
Used to copy into single dimension budget
Dimension Type :
Dimension Code :
Business Unit/Cost Center
Warehouse
LA2010 WagesLA0560 DepreciationLA4050 Interest CostsLA5500 Allocate to cost object
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Reference units
Reference unit = cost driver, surcharge base
Amount based and quantity based
Retrograde versus progressive planning
Equivalence factor– percentage assigned in case of more reference units
Budget and effective rates/surcharges
Rates can be integrated to Logistics as rate (machine/man hour tariff) or as surcharge
Can have link to logistic quantities and ledger account quantities
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Budget defaults
Ledger Account Structure
Reference Units
Performance Budget
Single Dimension Budget
Allocation Relations
Rates and Surcharges
Exercises12-26
Skill Objectives
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Exercise product costingRates / Surcharge
ProductiondepartmentProductiondepartment
WarehousedepartmentWarehousedepartment
Machine 1
Machine 1
Rate
Rate
Laptop ALaptop A Laptop BLaptop B
Item surcharge Item surcharge
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Integrate Rates / Surcharges
The rates and surcharges calculated in FBS can be integrated with CPR, and used for updating the cost price of an item
Cost Center Reference Unit
Financial Budget SystemFinancial Budget System Cost Price CalculationCost Price CalculationOperation Rate
Assembly Machine 1
Assembly Machine 2
318 Rate for machine 1
314 Rate for machine 2
Cost Center Reference Unit
Warehouse Direct Material
Warehouse Direct Material
Surcharge Trigger
Item A Receipt
Item B Receipt
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Actual Cost Price Code Used?
Calculate Cost and Valuation Prices
((tcmcticpr2210m000)
Actualize Cost and Valuation Prices
(ticpr2220m000)
Print Standard Cost Price Details by Item
(ticpr3405m000)
Integrate Budget Operation Rates
(tffbs1230m000)
Integrate Budget Surcharges
(tffbs1231m000)
Process integrate rates / surcharges
Yes
No
Optional
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Integration set up Rates/Surcharges
Update cost price
Exercises27-28
Skill Objectives
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Controlling cycle
Budget
Comparison
Reports
Actual
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Processing actual data
Enter actual data – actual amounts from GLD– actual quantities from GLD and Logistics– actual performances– actual hours from HRA
Calculate allowed costs (through price iteration)– total fixed costs + proportional part of variable costs
Calculate actual rates and surcharges
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Integrate ActualProduction
Integration Mapping Scheme– Efficiency Variance– Price Variance– Add.Calc.Office Variance
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ManufacturingHRA
ManufacturingHRA
General Ledger
General Ledger
Cost Accounting
Cost Accounting
Via Integration actual hours *operation rate
Via integration actual hours
Posting quantities
Via integrationquantities
Manualquantities
Actual quantities
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Import Actual Costs
Distribution method for calculating the reference unit amounts
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Import Actual Performances
Imported from
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Integrate ActualHours
CAT integration relations with HRA
Cost Center Reference Unit
Cost AccountingCost Accounting Hours AccountingHours AccountingKind of Integration
Assembly Machine 1
Assembly Machine 2
Machine Hours M1
Machine Hours M2
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Finance
Cost Accounting
expensesaccruels
costs ofbusinessaccounting
Overhead Cost Allocation Sheet
Cost TypesServiceCenters
Main Cost CenterMCC1 MCC2 MCC3 MCC4
primary costs
allocation from
allocation to
Order invoice
ORD 1 ORD 2 ORD 3 RevenuesCOGS
Statement of operating results
turnover
direct costsother ordercostsfixed costs a.deviations
x xx x
xx
OverheadCosts
CU 1 CU 2 CU 3
Sales
Actual amounts
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Integration Mapping Scheme
Import Actual amounts
Imports Actual performances
Integrate Rates/Surcharges
Exercises29-38
Skill Objectives
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Comparison
Controlling cycle
Budget
Reports
Actual
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Efficiency Deviation– Compare of planned consumption vs actual (at management/cost center level)
Occupation Deviation– Planned fixed costs vs actually charged portion of fixed costs
Over/Undercoverage Deviation– Only occurs if effective rates/surcharges differs from calculated values
((Effective rate - Calc. value) x actual performance)
Consumption Deviation– (Actual costs - allowed costs)
Deviation analysis
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Deviation analysisOccupation
Occupation deviation (absorption variance)– Planned fixed costs vs actually charged portion of fixed costs– Only applicable for full cost accounting systems– Calculation:
• quantity based: allowed costs - (budgeted performance quantity * total effective rate/surcharge)
• amount based: allowed costs - (surcharge base amount * effective surcharge)
– Example: $100,000 - ($4,000 * $5) = $80,000
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Deviation analysisOver/Under coverage
Over/under coverage deviation (political variance)– Only occurs if effective rates/surcharges differ from calculated
values– Decision made by higher management– Calculation: ((effective rate - calc. value) x actual performance)– Example: ($15 - $13) * $100,000 = $20,000
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Deviation analysisConsumption
Consumption deviation (efficiency variance)– comparison of planned consumption vs actual (at management/cost
center level)– calculation: actual costs - allowed costs– example: $120,000 - $100,000 = $20,000
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Budgeted Costs
Costs
Budgeted
Fixed Costs
Political Price
Performance (hours etc.) Budget
Actual Costs
Allowed Costs
Comparison variance analysis
Actual
Efficiency
Absorption
Political
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Actual costs = the actual costs ( in the general ledger )
Budgeted costs = budget performance X budgeted cost price per piece
Allowed costs = total fixed budget + ( actual performance x variable budgeted cost price per piece ).
Efficiency variance = Actual costs -/- Allowed costs
Absorption variance = Allowed costs -/- ( Actual performance x total budgeted cost price per piece )
or = (actual performance -/- budgeted performance ) x fixed budgeted cost price per piece
Political variance = (budgeted total cost price per piece -/- accepted cost price per piece) x actual performance
Summary comparison
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Integrate Deviations
Used for statement reporting
Cost Center Cost Portion
Source DimensionSource Dimension Destination DimensionDestination Dimension
Assembly Occupation
Assembly Consumption
Cost Center Debit Account
Assembly Occupation Dev.
Assembly Consumption Dev
Credit Account
Deviation allocation
Deviation allocation
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Deviations
Integration of Operating results
Exercise39
Skill Objectives
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Reports
Controlling cycle
Budget
Comparison
Actual
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Defined report structures can be used
Hierarchies can be used independent from the default hierarchy of the report structure
Cost Allocation Sheet
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Ledger accounts.Dim.code
Actual Budget Allowed
COSTCOST VARIANCESVARIANCES
EfficiencyAbsorption Political
Cost allocation sheetExample
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Gross Revenues - /- Discounts - /- Commissions _____________
= Net Revenues - /- Variable Costs _____________
= Contribution Margin I - /- Fixed Costs _____________
= Contribution Margin II
Gross Revenues - /- Discounts - /- Commissions _____________
= Net Revenues - /- Variable Costs _____________
= Contribution Margin I - /- Fixed Costs _____________
= Contribution Margin II
Margin statements
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Statement of operating resultPer cost center and/or cost object
Turnover(-/-) Discounts/Commissions--------------------------------------------- Net Result(-/-) Direct Material Costs(-/-) Direct Variable Labor(-/-) Direct Variable Machine--------------------------------------------- Contribution Margin I(-/-) Direct Fixed Labor(-/-) Direct Fixed Machine(-/-) Material Surcharges Fixed(-/-) Production Surcharges Fixed--------------------------------------------- Contribution Margin II(-/-) Settlement of Remaining Costs--------------------------------------------- Contribution Margin III
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Cost Allocation Sheet
Statements
Case6.2
Skill Objectives
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Activity-based CostingSingle Dimension Budgeting
Indirect costsIndirect costs
Direct wagesDirect wages
Direct materialsDirect materials
ActivitiesActivities
Cost objectsCost objects
Resource cost driver(cost category)
Activity cost driver(allocation relations)
ABC
A method to allocate indirect costs
Activities are the center of interest (e.g. purchase)
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Activity Based CostingSingle Dimension Budgeting
MaintenanceMaintenance
Product AProduct A
FacilitiesFacilities EnergyEnergy
ProductionProduction WarehouseWarehouse
Product BProduct B
Material HandlingMaterial Handling PackagingPackagingPaintingPainting AssemblingAssembling
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: € 200.000.=Activity
Item A Item B Item C
Cost object
120.000 120.000 100.000Surcharge basePurchased items
1,00 1,00 0,50 0,50 0,200,20 Surcharge in €
Purchase
ABC in perspective
Cost driver Purchase order lines 30.000 15.000 5.000
Bill of Activities%.
60 % 30 % 10 %
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Relations in ABC
Cost objects consume activities
Activities require resources
Cost objects, activities and/or resources are related to departments
Activities can be performed for all types of cost objects varying from products to sales areas or customers (groups)
Most often it is a combination of cost objects
Activity view and organization view can have a lot of overlaps– the process oriented organization
– the cost center oriented organization
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FBS versus CATActivity-based Costing
CAT
Allocation Relations
ImportActual
RetrogadeCalculation
Price Iteration
IntegrationSet up
GLD HRA FBSLogistic
GenerateBoA
FBS
AllocationResults
BudgetDistribution
BudgetCode
ReferenceUnits
Hierarchies
ReportStructures
LARelations
BudgetDefaults
IntegrationSet up
CPR
PerformanceBudget
Single Dim.Budget
Integrate Results
HRA Surcharge RatesOperationResults
Surcharge Rates Deviation
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Reference unitActivities
Reference Unit = Cost Driver or Surcharge Base
Cost driver • Purchase OrdersPurchase Orders for a purchasing activity• DeliveriesDeliveries for an issuing activity• Items ManufacturedItems Manufactured for an assembling activity
Cost driver • Purchase OrdersPurchase Orders for a purchasing activity• DeliveriesDeliveries for an issuing activity• Items ManufacturedItems Manufactured for an assembling activity
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L2800 Systems DepartmentL2800 Systems Department
L2710Wood Cutting
L2710Wood Cutting
L2720SandingL2720
SandingL2740
AssemblyL2740
Assembly
600100 Rent Exp 100%Facilities 610010 Electricity Exp 100%
630100 Maintenance Exp 100%
600100 Rent Exp 100%Facilities 610010 Electricity Exp 100%
630100 Maintenance Exp 100%
Source
Dimension
Cost
Category
Target
Dimension
30% 30% 40%
Allocations through Cost Categories
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Building
Depreciation
Insurance
Cost. Types(Ledger acc.)
Assembly
Production
Department
Warehouse
Sales
Allocated
department
- Item
- Item group- Project
Cost
objects
Overhead department
Department
Costs
category I
Costs
category II
*
*
*Costs-
category III
Cost
category
*PrimaryCost Driver
Activity
Inspection
Purchase-
orders
Sales--
orders
SecondaryCost Driver
*
*
*
*
Activity-based Costing
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((Cost object/cost driver) * activity)/surcharge base
Item, Item Group,or Project
Item, Item Group,or Project
Logistical Datawhich drives
the cost
Logistical Datawhich drives
the cost
Cost of theActivity
Cost of theActivity
Basis forAllocating
Cost
Basis forAllocating
Cost
ABC Calculation
cost driver = reference unit
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Traditional calculation
ABC example (1)
Product (cost object) B R Total
Direct €0,3 per X 27.000 3.000 30.000
Overhead €0,8 per X 72.000 8.000 80.000
Total €1,1 99.000 11.000 110.000
Cost price 1,1 1,1
X= 90,000 for B and X=10,000 for R (X= number of products);
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Product (cost object) B R Total
Direct €0,3 per X 27,000 3,000 30,000
Setup 421Y 37,894 42,106 80,000
Total 64,894 45,106 110,000
Cost price 0.72 4.51
X= 90,000 for B and X=10,000 for R (X= number of products);
Y= number of setups (activity driver); B: 90; R: 100; Driver rate: 80,000/190=421
ABC example (2)
ABC calculation
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Cost prices Traditional ABC
Product B 1,1 0,72
Product R 1,1 4,51
“How cost accounting distorts product costs” !(Cooper & Kaplan, 1988)
Traditional calculation does not take batch sizes into account
ABC example (3)
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Activities
Bill of Activities
Logistic cost drivers
Exercises40-57
Skill Objectives
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Why first implement Controlling, and than Logistics ?
Implementation
Actual Hours of HRA Import in CAT• Work Center• Employee• Machine• Task
Actual logistic performances Import in CAT• Sales Orders• Sales Order Lines• BOM Lines• Routing Lines• …..
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Activity Based Product CostingSingle Dimension Budgeting
MaintenanceMaintenance
Product AProduct A
FacilitiesFacilities EnergyEnergy
ProductionProduction WarehouseWarehouse
Product BProduct B
Material HandlingMaterial Handling PackagingPackagingPaintingPainting AssemblingAssembling
93© Baan Development BV
Activity Based Product CostingSingle Dimension Budgeting
MaintenanceMaintenance
Product AProduct A
FacilitiesFacilities EnergyEnergy
ProductionProduction WarehouseWarehouse
Product BProduct B
Material HandlingMaterial Handling PackagingPackaging
Rate M1
Rate M2
SurchargeHandling
SurchargePacking
SurchargeHandling
SurchargePacking