business strategies

Business StrategiesBusiness 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.


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-MartSouthwest Airlines


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 BusinessValue Chain of a Business

A value chain is the way a business adds value for its

customers by processing inputs into product or service.

InputsInputs Business Business ProcessesProcesses

Products or Products or ServicesServices

Customer Customer ValueValue

Merchandising BusinessMerchandising Business

ProductProduct

Wal-Mart General merchandiseToys “R” Us ToysCircuit City Consumer electronicsLands’ End ApparelAmazon.com Internet books, music, video

retailer

Types of Businesses

Karakteristik Operasi Perusahaan Dagang

KustomerGudang Barang

Bagian Penjualan

Bagian Administratif/Umum

PenjualanKos barang terjual Sediaan, awal Pembelian

Sediaan, akhir Laba kotor

Biaya penjualanBiaya administratif Laba operasi

XXXXXXXXXXXX

XXXXXX

XXX

XXXXXX

XXXXXX

Statemen laba-rugi

Penjualan

Financial Statements for Merchandising Companies

Purchases ofInventory plus

Freight-In Inventory

Sales Revenue

Cost ofGoods Sold

INCOME STATEMENT

Operating Expenses

InventoriableCosts

BALANCE SHEET

equals Operating Income

whensalesoccur

deduct

equals Gross Margindeduct

PeriodCosts

Manufacturing BusinessManufacturing Business

ProductProduct

General Motors Cars, trucks, vansIntel Computer chipsBoeing Jet aircraftNike Athletic shoes and apparelCoca-Cola BeveragesSony Stereos and television

Types of Businesses

Karakteristik Operasi Perusahaan Manufaktur

Gudang Barang

Bagian Penjualan

Bagian Administratif/Umum

Kos barang terjual

Statemen laba-rugi

PenjualanBiaya penjualan

Biaya administratif

Pembelian

Pabrik

Gudangbahan baku

Barang jadi

Laporan kos produksi

Kos barangmanufakturan

Financial Statements forManufacturing Companies

MaterialsInventory

FinishedGoods

Inventory

Sales Revenue

Cost ofGoods Sold

INCOME STATEMENT

Operating Expenses

InventoriableCosts

BALANCE SHEET

equals Operating Income

whensalesoccur

deduct

equals Gross Margindeduct

Work inProcess

Inventory

PeriodCosts

Service BusinessService Business

ProductProduct

Disney EntertainmentDelta Air Lines TransportationMarriott Hotels Hospitality and lodgingMerrill Lynch Financial adviceSprint Telecommunication

Types of Businesses

Revenues – Expenses = Operating income

Financial Statements forService Companies

• There is no inventory and thus no inventoriable costs.

• The income statement does not include cost of goods sold.

Service, Merchandising, and Manufacturing Companies

Service• 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.


• What is the cost of goods manufactured?

Beginning work in process $ 20,000Direct labor $100,000Direct materials 70,000Mfg. overhead 150,000 320,000Ending work in process (18,000)Cost of goods manufactured $322,000


• 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?


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


• 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?


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 availablefor 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 Manufacturing Cost TermsTerms

EXPENSEEXPENSE

ASSETASSETEXPENSEEXPENSE

COSTCOST

Payroll Check

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:

Managerial Cost Concepts

LO 3 – Define the three classes of manufacturing costs.LO 3 – Define the three classes of manufacturing costs.

Komponen Kos Produk

Overhead

Material (bahan baku) Tenaga kerja langsung

kos

kos

Aliran fisik

Bahan bakuMesin

Tenaga kerja

K a s

Utang Produk

Penyimbolan elemen

koskos

kos

kos

Pengukuran elemenuntuk data dasar

Sistem informasi

Rp1.500.000Rp750.000

Rp2.500.000Rp3.500.000 Rp7.500.000

Rp1.750.000

Konsep kos sebagai bahan olah akuntansi

Manufacturing Costs

Materials

LO 3 Define the three classes of manufacturing LO 3 Define the three classes of manufacturing costs.costs.

Raw MaterialsBasic materials used in

manufacturing

Direct Materials Raw materials that can be physically and directly associated with the

finished product

Manufacturing Costs

Materials


Indirect MaterialsRaw materials that cannot be easily associated with the finished productNot physically part of the finished product or they are an insignificant part of finished product in terms of costConsidered part of manufacturing overhead

Manufacturing Costs

Labor


Direct LaborWork 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

Manufacturing Costs


Manufacturing Overhead

Costs that are indirectly associated with manufacturing the productIncludes all manufacturing costs except direct materials and direct labor

Flow of Manufacturing CostsFlow of Manufacturing Costs

DMDM

Materials Work in Process Finished Goods

Wages Payable Factory Overhead

Cost of Goods Sold

DMDMMaterialsPurchased

TotalWages

Direct materials used in productionDMDM

DMDM


Wages Payable Factory Overhead

Cost of Goods Sold

IMIM


TotalWages

Indirect materials used in productionIMIM


IMIM

DMDM


Wages Payable

DLDL

Factory Overhead

Cost of Goods Sold

IMIM


TotalWages

Direct labor used in productionDLDL


IMIM

DLDL

DMDM


Wages Payable

DLDL

Factory Overhead

Cost of Goods Sold

IMIM

ILIL

DMDM

IMIM

DLDL

ILIL

MaterialsPurchased

TotalWages

Indirect labor used in productionILIL


DMDM


Wages Payable

DLDL

Factory Overhead

Cost of Goods Sold

IMIM

ILIL

DMDM

IMIM

DLDL

ILIL

MaterialsPurchased

TotalWages

Other factory overhead costs incurred during production

OFOHOFOH


OFOHOFOH

DMDM


Wages Payable

DLDL

Factory Overhead

Cost of Goods Sold

IMIM

ILIL

DMDM

IMIM

DLDL

ILIL

OFOHOFOH

MaterialsPurchased

TotalWages

Based on predetermined overhead rate

FOHAFOHA

Factory overhead applied to work in processFOHAFOHA


FOHAFOHA

DMDM


Wages Payable

DLDL

Factory Overhead

Cost of Goods Sold

IMIM

ILIL

DMDM

IMIM

DLDL

FOHAFOHA

ILIL

OFOHOFOH

COGMCOGMCOGMCOGMMaterialsPurchased

TotalWages

FOHAFOHA

Cost of goods manufactured and transferred to finished goods

COGMCOGM


DMDM


Wages Payable

DLDL

Factory Overhead

Cost of Goods Sold

IMIM

ILIL

DMDM

IMIM

DLDL

FOHAFOHA

ILIL

OFOHOFOH

SOLDSOLDMaterialsPurchased

TotalWages

FOHAFOHA

Finished goods soldSOLDSOLD

COGMCOGMCOGMCOGM


SOLDSOLD

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.

Review Question


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 PerusahaanDalam Perusahaan terdapat 3 fungsi pokok, yaitu Produksi, Pemasaran dan Administrasi & Umum

Biaya Produksimerupakan biaya yang terjadi untuk mengolah bahan baku menjadi barang jadi

Biaya PemasaranMerupakan biaya yang terjadi untuk melaksanakan pemasaran

Biaya Administrasi & UmumMerupakan biaya untuk mengkoordinasi kegiatan produksi & pemasaran

Klasifikasi Kos Fungsional

Tenaga KerjaLangsung

Produksi

Operasi Total

Komersial

Overhead

Bahan Baku

+

=

+

+

=

Pemasaran

Tenaga KerjaTaklangsung

OverheadLainnya

BahanPenolong + +

+

=

=Administratif/Umum

Konversi

Utama

Perioda (non pemanufakturan)

Klasifikasi Umum Biaya

Biaya Produksi: BB (langsung -tidak langsung)BTK (langsung- tidak langsung)BOP

Biaya Non Produksi: Biaya pemasaran atau penjualanBiaya administrasi

Metode Penentuan Biaya Produksi

• Full CostingMerupakan 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 ProduksiB. Adm Umum + B. Pemasaran

+Kos Non Produksi

Metode Penentuan Biaya Produksi

• Variable CostingMerupakan metode penentuan kos produksi

yang hanya memperhitungkan biaya produksi yang berperilaku variabel ke dalam kos produksi

BBB

BTKL

BOP VAR

B. AD UMVAR

B. MARKVAR

BOP FIX

B. AD UMFIX

B. MARKFIX

• 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 administrasipengeluaran 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 LangsungBiaya 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

• Klasifikasi biaya untuk pengambilan keputusan:

Biaya diferensialBiaya kesempatanBiaya 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 Costs

• What are product costs?• They are the costs to produce (or

purchase) tangible products intended for sale.

Product Versus Period Costs


LO 4 Distinguish between product and period costs.LO 4 Distinguish between product and period costs.

Product Costs

Components: direct material cost, direct labor cost, and manufacturing overhead

A necessary and integral part of producing the productRecorded as inventory when incurredNot an expense until the finished goods inventory is sold then cost of goods sold

Inventoriableproduct

costs

Fullproduct

costs

Product Costs

• There are two types of product costs:

External Reporting

Inventoriableproduct

costs

Periodcosts

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.


• 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.

DirectMaterials

DirectLabor

IndirectLabor

IndirectMaterials

Other

Manufacturing Overhead



DirectMaterials

DirectLabor

Prime Costs = Direct Materials + Direct Labor

FactoryFactoryOverheadOverhead

DirectMaterials

DirectDirectLaborLabor

ProductProductCostsCosts

The cost of materials that are an integral part of the product.

The cost of labor directly involved in converting material into the product.

Manufacturing costs other than direct materials and direct labor.


LO 4 Distinguish between product and period costs.LO 4 Distinguish between product and period costs.

Period Costs

Matched with revenue of a specific time period and charged to expense as incurred

Non-manufacturing costsDeducted from revenues in period incurred to determine net incomeIncludes all selling and administrative expenses


LO 4 Distinguish between product costs and LO 4 Distinguish between product costs and period costsperiod costs..

EXAMPLES OF PERIOD COSTSEXAMPLES OF PERIOD COSTS

SELLING EXPENSES

Advertising expenses

Sales salaries expenses

Commission expenses

EXAMPLES OF PERIOD COSTSEXAMPLES OF PERIOD COSTS

ADMINISTATIVE EXPENSES Office salaries expenses

Office supplies expenses

Depreciation expense— office buildings and office equipment

Goodwell PrintersIncome Statement

For the Month Ended December 31, 2006Sales $28,000Cost of goods sold 20,150Gross profit $ 7,850Selling and admin. expenses:

Sales salaries expense $2,000Office salaries expense 1,500Total selling and admin. expenses

3,500Income 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.


• What are examples of cost objects?– individual products– alternative marketing strategies– geographic segments of the business– departments


• 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

LO 5 Explain the difference between a LO 5 Explain the difference between a merchandising and a manufacturing income merchandising and a manufacturing income

statement.statement.

Income Statement

The income statement for a manufacturer is similar to that of a merchandiser except for the cost of goods sold

section.

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

152.3002.7002.000

148.6004.200

1.5002.000

33.700

152.800186.500

36.000

38.85025.150

255.500

3.500252.000

150.500101.500

64.00037.500

Cost of Goods Sold ComponentsMerchandiser versus Manufacturer


statement.statement.

Cost of Goods Sold Section of the Income Statement


statementstatement..

Determining the Cost of Goods Manufactured

LO 6 Indicate how cost of goods manufactured is determinedLO 6 Indicate how cost of goods manufactured is determined ..

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 determinedLO 6 Indicate how cost of goods manufactured is determined ..

Contoh Isi Laporan Kos Produksi

Sediaan tegel dalam proses, 1 JanuariPemakaian 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 dipakaiTenaga kerja langsungOverhead pabrikGaji pengawas produksiDepresiasi bangungan-PabrikDepresiasi mesin cetak dan presPemakaian bahan penolongListrik dan airAsuransi-Pabrik Kos produksi masuk prosesSediaan tegel dalam proses, 31 Desember Kos barang manufakturan

Rp 4.200.00013.400.000

Rp17.600.0003.800.000

Rp 2.140.000850.000

1.500.000840.000357.000152.000235.000

Rp 2.450.000

13.800.0007.490.000

6.074.000Rp29.814.000

2.100.000Rp27.714.000

Perusahaan Tegel Cap GAJAHLampiran A: Laporan Kos Produksi

untuk tahun berakhir 31 Desember 2001

Balance Sheet - Inventories

LO 7 Explain the difference between a merchandising and a LO 7 Explain the difference between a merchandising and a manufacturing balance sheet.manufacturing balance sheet.

Merchandising Company

One category of inventory:Merchandise Inventory

Manufacturing CompanyMay have three inventories:

Raw Materials Work in Process Finished Goods

Balance Sheet - Inventories

LO 7 Explain the difference between a merchandising and a LO 7 Explain the difference between a merchandising and a manufacturing balance sheetmanufacturing balance sheet

Match Terms & Definitions

Cost

Expense

Cost Object

Direct Cost

Opportunity Cost

Indirect Cost

The return that could not be realized from the best forgone alternative use of a resource

A cost charged against revenue

Costs not directly related to a cost object

Any item for which a manager wants to measure a cost

Costs directly related to a cost object

A sacrifice of resources

Direct Materials are a:

Product Manufacturing Period Cost Overhead Cost

a. Yes Yes No b. Yes No No c. Yes Yes Yesd. No No No

Review Question

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

DMDMDLMOMODMDMMO

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

ProductPeriodPeriodPeriod

ProductProduct

End of Week

business strategies

Documents

cost of goods available

manufacturing companiesservice

business designs

direct labor

direct materials

ending work

process inventories

differential strategy