Ons is vandag hier as gevolg van
DIE LIEFDE WAT VOOR
ONS GEKOM HET
1993
HANLU & YOLANDÉ
Ontmoet in Saldanhabaai. Yolandé het as
ontvangs by Hoedjiesbaai Hotel gewerk en
Hanlu was ‘n polisieman. Gereelde besoeke
aan die hotel en polisiestasie (nie
MANAGEMENT
werksverwant) was die begin van ’n besondere
en lewenslange liefdesverhaal.
CHRIS & ERICA
1993
Beide het regte aan Kovsies geswot. Chris
ACCOUNTING
was ‘n beter student as Erica (wat sy ontken),
maar het tog sy notas in haar posbus voor
belangrike toetse gelos. Albei het hokkie vir
die Universiteit gespeel en die res is
HENCO SE OUERS
geskiedenis.
771 INGE SE OUERS
1965
MDC
ISAK & ELIZE
Ontmoet aan die Weskus in die Dwarskerbos
omgewing waar beide families woonagtig was.
Hanlu het in oupa se voetspore gevolg en ook
‘n polisieman geword terwyl ouma ‘n
tuisteskepper was. Jong verliefdes wat ‘n lang
pad saam geloop het. 1957
HANNES & ANNETTE
Beide het BA met Latyn en Engels aan die
UVS studeer en het mekaar in die klas
ontmoet. Oupa Hannes het vir ouma Annette
met haar Latyn huiswerk gehelp, klaarblyklik
omdat dit vir haar te moeilik was (al was sy
slim en nogal mooi ook)
HANLU SE OUERS CHRIS SE OUERS
1967
COENRAAD & ELIZABETH
Ontmoet by ‘n boere opskop en raak
halsoorkop verlief. Die liefde is nie altyd so
geduldig nie en hulle trou pas nadat hulle
skool voltooi. Ouma was ‘n boekhoudster en
oupa ‘n grafsteenmaker. Vrolik en lief vir
dans.
1957
GIEL & MARA
Ontmoet in Bloemfontein. Oupa Giel was ‘n
gesondheids inspekteur en ouma Mara ‘n
debiteure klerk. Hulle vestig in Windhoek en
was Suidwesters in murg en been. Lief vir
bier en biltong, soos hulle kinders.
YOLANDÉ SE OUERS ERICA SE OUERS
,
, COST ALLOCATION SUMMARY
X & Y Divisions are regarded as profit centres for performance measurement purposes
Therefore, costs should be allocated on a fair basis which reflects the usage of resources as fairly as possible
As well as using cause & effect principles to measure the performance
The importance of selecting appropriate cost drivers is more critical when cost allocations are used for decision making. Therefore, it might not be worth
it to implement some of the above recommendations if the allocation is only for the purpose of reporting and not for decision-making purposes as the
cost v benefit may not be justified.
Accurate allocation of costs (and therefore selection of appropriate allocates bases) for low cost providers is extremely important to their pricing and
tracking efficiency, as opposed to the premium priced luxury, where cost allocations will be less important.
A low cost provider will likely be a lot more cost conscious, and attempt to save costs, whereas a premium cost division may have more focus on
customer experience, and therefore not be as careful in minimizing costs. Therefore a straight base per unit of allocation would be inappropriate.
*if costs can be directly attributable to a specific activity, they should not be allocated
Sales, promotion, general and administration expenses are probably unavoidable and should arguably not be allocated to divisions as this is not under
their control.
Direct costs of xxx are correctly attributed to the two divisions
indirect cost of labour is correctly allocated using an appropriate cost driver (labour hours).
Allocations should be based on budgeted labour rates, not actual data, to avoid the inefficiencies of rate negotiations being passed on to the other
divisions
There is no cause and effect relationship between xxx
This allocation is therefore arbitrary;
Adding the number of events together, assumes they are all identical irrespective of the activity level
This is unrealistic given that one division has a different activity level
These costs are allocated based on the CFO’s opinion of the usage.
This is not the most accurate basis as it is subjective and not based on any objective numbers or budgeted information.
Allocation of these costs is arbitrary and counter-productive. It is based purely on the CFO’s opinion without any empirical data evidence showing some
form of correlation.
If a division does not indicate a cost, head office should not allocate all the costs to the division but rather retain the portion of costs relating to that
division to match its income
Under/over-recovery
1. The need to adjust for an over/(under) recovery of fixed overheads arises where a budgeted overhead allocation rate is used to
allocate the fixed manufacturing overheads to production or services based on an actual volume of activity.
2. In addition, an over/(under) allocation will only arise if there is a difference between budgeted and actual volumes / or cost.
3. If a company does not use a budgeted overhead allocation rate (they do not absorb fixed manufacturing overheads but recognises
the actual fixed overheads as they are incurred), an over/(under) allocation of fixed overheads will not occur.
4. As a company does not allocate its fixed overheads based on the services it delivers, there is no shortcoming in the accounting
system. However, from a cost control and pricing decision perspective, benefit can be gained by allocating overheads to products
and services.
5. From a pricing decision perspective, the allocation of fixed overheads to services helps ensure that all committed costs are recovered
in the long-term.
6. From a cost control perspective, the allocation of fixed overheads enables any under or over- recoveries to be analysed in detail and
separated between that part of the under/over recovery that was controllable (therefore not part of the service cost) and that part
which was unavoidable (therefore included in the cost of the service).
, ALLOCATION
(just ideas à must be question specific)
COSTS Suitable allocation basis Inappropriate
Direct cost of materials Allocate based on directly attributable Directly attributable it is not appropriate to allocate based on
costs an allocation basis
Directly attributable costs
Depreciation & if the depreciable items are distinctive, Directly attributed it is not appropriate to allocate based on
amortisation the cost should be directly attributed to an allocation basis
each division
Operating lease charges
Salaries & Expenses may be a direct or indirect cost depending Salaries and expenses and
on whether the staff of the two divisions training costs are correctly
are interchangeable or only used for their allocated using a cost driver
specific division (hours spent working) for which a
strongest correlation exists
between the cost driver and the
costs
Transport costs The nature of the products, size of the To allocate based on the number of
divisions and need for deliveries must be divisions, otherwise one division will
accounted for carry the costs even if they are unrelated
Storage costs The nature of the products, size of the
divisions and need for storage must be
established
Indirect labour Allocations should be based on budgeted labour hours
labour rates, not actual data, to avoid the
inefficiencies of rate negotiations being
passed on to the other divisions
promotion, general and do not allocate are probably unavoidable and should
administration expenses arguably not be allocated to divisions as
this is not under their control
Marketing expenses Should only be allocated to those Floor space could represent the division
divisions which carry the brand (full size and be linked to sales but is not the
expense) most accurate allocation basis
Administration costs These are facility sustaining expenses Often no suitable. Basis can be
found other than a volume-
related allocation basis
if no other suitable cost driver:
can use floor space
DIE LIEFDE WAT VOOR
ONS GEKOM HET
1993
HANLU & YOLANDÉ
Ontmoet in Saldanhabaai. Yolandé het as
ontvangs by Hoedjiesbaai Hotel gewerk en
Hanlu was ‘n polisieman. Gereelde besoeke
aan die hotel en polisiestasie (nie
MANAGEMENT
werksverwant) was die begin van ’n besondere
en lewenslange liefdesverhaal.
CHRIS & ERICA
1993
Beide het regte aan Kovsies geswot. Chris
ACCOUNTING
was ‘n beter student as Erica (wat sy ontken),
maar het tog sy notas in haar posbus voor
belangrike toetse gelos. Albei het hokkie vir
die Universiteit gespeel en die res is
HENCO SE OUERS
geskiedenis.
771 INGE SE OUERS
1965
MDC
ISAK & ELIZE
Ontmoet aan die Weskus in die Dwarskerbos
omgewing waar beide families woonagtig was.
Hanlu het in oupa se voetspore gevolg en ook
‘n polisieman geword terwyl ouma ‘n
tuisteskepper was. Jong verliefdes wat ‘n lang
pad saam geloop het. 1957
HANNES & ANNETTE
Beide het BA met Latyn en Engels aan die
UVS studeer en het mekaar in die klas
ontmoet. Oupa Hannes het vir ouma Annette
met haar Latyn huiswerk gehelp, klaarblyklik
omdat dit vir haar te moeilik was (al was sy
slim en nogal mooi ook)
HANLU SE OUERS CHRIS SE OUERS
1967
COENRAAD & ELIZABETH
Ontmoet by ‘n boere opskop en raak
halsoorkop verlief. Die liefde is nie altyd so
geduldig nie en hulle trou pas nadat hulle
skool voltooi. Ouma was ‘n boekhoudster en
oupa ‘n grafsteenmaker. Vrolik en lief vir
dans.
1957
GIEL & MARA
Ontmoet in Bloemfontein. Oupa Giel was ‘n
gesondheids inspekteur en ouma Mara ‘n
debiteure klerk. Hulle vestig in Windhoek en
was Suidwesters in murg en been. Lief vir
bier en biltong, soos hulle kinders.
YOLANDÉ SE OUERS ERICA SE OUERS
,
, COST ALLOCATION SUMMARY
X & Y Divisions are regarded as profit centres for performance measurement purposes
Therefore, costs should be allocated on a fair basis which reflects the usage of resources as fairly as possible
As well as using cause & effect principles to measure the performance
The importance of selecting appropriate cost drivers is more critical when cost allocations are used for decision making. Therefore, it might not be worth
it to implement some of the above recommendations if the allocation is only for the purpose of reporting and not for decision-making purposes as the
cost v benefit may not be justified.
Accurate allocation of costs (and therefore selection of appropriate allocates bases) for low cost providers is extremely important to their pricing and
tracking efficiency, as opposed to the premium priced luxury, where cost allocations will be less important.
A low cost provider will likely be a lot more cost conscious, and attempt to save costs, whereas a premium cost division may have more focus on
customer experience, and therefore not be as careful in minimizing costs. Therefore a straight base per unit of allocation would be inappropriate.
*if costs can be directly attributable to a specific activity, they should not be allocated
Sales, promotion, general and administration expenses are probably unavoidable and should arguably not be allocated to divisions as this is not under
their control.
Direct costs of xxx are correctly attributed to the two divisions
indirect cost of labour is correctly allocated using an appropriate cost driver (labour hours).
Allocations should be based on budgeted labour rates, not actual data, to avoid the inefficiencies of rate negotiations being passed on to the other
divisions
There is no cause and effect relationship between xxx
This allocation is therefore arbitrary;
Adding the number of events together, assumes they are all identical irrespective of the activity level
This is unrealistic given that one division has a different activity level
These costs are allocated based on the CFO’s opinion of the usage.
This is not the most accurate basis as it is subjective and not based on any objective numbers or budgeted information.
Allocation of these costs is arbitrary and counter-productive. It is based purely on the CFO’s opinion without any empirical data evidence showing some
form of correlation.
If a division does not indicate a cost, head office should not allocate all the costs to the division but rather retain the portion of costs relating to that
division to match its income
Under/over-recovery
1. The need to adjust for an over/(under) recovery of fixed overheads arises where a budgeted overhead allocation rate is used to
allocate the fixed manufacturing overheads to production or services based on an actual volume of activity.
2. In addition, an over/(under) allocation will only arise if there is a difference between budgeted and actual volumes / or cost.
3. If a company does not use a budgeted overhead allocation rate (they do not absorb fixed manufacturing overheads but recognises
the actual fixed overheads as they are incurred), an over/(under) allocation of fixed overheads will not occur.
4. As a company does not allocate its fixed overheads based on the services it delivers, there is no shortcoming in the accounting
system. However, from a cost control and pricing decision perspective, benefit can be gained by allocating overheads to products
and services.
5. From a pricing decision perspective, the allocation of fixed overheads to services helps ensure that all committed costs are recovered
in the long-term.
6. From a cost control perspective, the allocation of fixed overheads enables any under or over- recoveries to be analysed in detail and
separated between that part of the under/over recovery that was controllable (therefore not part of the service cost) and that part
which was unavoidable (therefore included in the cost of the service).
, ALLOCATION
(just ideas à must be question specific)
COSTS Suitable allocation basis Inappropriate
Direct cost of materials Allocate based on directly attributable Directly attributable it is not appropriate to allocate based on
costs an allocation basis
Directly attributable costs
Depreciation & if the depreciable items are distinctive, Directly attributed it is not appropriate to allocate based on
amortisation the cost should be directly attributed to an allocation basis
each division
Operating lease charges
Salaries & Expenses may be a direct or indirect cost depending Salaries and expenses and
on whether the staff of the two divisions training costs are correctly
are interchangeable or only used for their allocated using a cost driver
specific division (hours spent working) for which a
strongest correlation exists
between the cost driver and the
costs
Transport costs The nature of the products, size of the To allocate based on the number of
divisions and need for deliveries must be divisions, otherwise one division will
accounted for carry the costs even if they are unrelated
Storage costs The nature of the products, size of the
divisions and need for storage must be
established
Indirect labour Allocations should be based on budgeted labour hours
labour rates, not actual data, to avoid the
inefficiencies of rate negotiations being
passed on to the other divisions
promotion, general and do not allocate are probably unavoidable and should
administration expenses arguably not be allocated to divisions as
this is not under their control
Marketing expenses Should only be allocated to those Floor space could represent the division
divisions which carry the brand (full size and be linked to sales but is not the
expense) most accurate allocation basis
Administration costs These are facility sustaining expenses Often no suitable. Basis can be
found other than a volume-
related allocation basis
if no other suitable cost driver:
can use floor space
