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Management Accounting hoorcollege aantekeningen 2021

Management Accounting (Tilburg University)

StudeerSnel wordt niet gesponsord of ondersteund door een hogeschool of universiteit

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Management Accounting
Hoorcollege 1
Inleiding

Management accounting measures and reports financial and non-financial information and helps and
motivates managers to make good decisions to fulfill an organization’s goals.
Management accounting is a value-adding continuous improvement process of planning, designing,
measuring and operating both nonfinancial information systems and financial information systems
that guides management action, motivates behavior, and supports and creates the cultural value
necessary to achieve an organization’s strategic, tactical and operating objectives.

Cost accounting measures and reports financial and non-financial data that relates to the cost of
acquiring or consuming resources by an organization.

Decision facilitating and decision influencing

Decision facilitating  management accounting is belangrijk om de link tussen strategie en financiële
controle te versterken. MA kan expertise inzetten om scenario’s of strategische opties te vergelijken
Decision influencing 
Principal-agent problems:
- Moral hazard  how to motivate people into the organization to provide effort for the
principal?
 Bonus pay-outs
 Targets after contract signed
 Variance analyses – budgets
 Non-financial – monitoring
- Adverse selection  how to attract the right workers to my company to make sure they are
willing to work?
 Screening / referral / observation
 Ex-ante targets
 Interviewing / personality tests
Guide people toward creating value for the firm:
- Motivating employees: management accounting provides a selection of best alternative
methods of doing things. It motivates employees to improve their performance by setting
targets and using incentive schemes
- Coordinating among departments: management accounting is helpful in coordinating the
departments of an organization by applying thorough functional budgeting and providing
reports for the same to the management on a regular basis
- Controlling performance: in order to assure effective control, various techniques are used by
a management accountant such as budgetary control, standard costing, management audit,
etc. Management accounting provides a proper management control system to the
management. Reports are provided to the management regarding the effective and efficient
use of resources.

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Management accounting in actie

Decide on company’s goals, decide how to attain these goals, plan resource usage
and allocation, predict results

Cost accounting decisions

- Costs for inventory and external reporting
- Cost accounting for important decisions to assist marketing, operations,…
 Evaluation profitability of products, customers, etc.
 Cost data for pricing, quality investments, outsourcing
decisions.
 Cost reduction, break-even for start-ups or new ventures

Management control – evaluation towards goals

- Translate plans into concrete actions  budgets, responsibility centers
- Deviations of operations against original plan  variance analyses, BSC
- Performance management and evaluation  bonus / compensation

Management accounting vs. Financial accounting

Management accounting is meer

strategisch, meer lange termijn, en
meer niet-financieel naast financieel.

Strategic management accounting

= a type of accounting that focuses not only on internal factors of a company, but factors that are
external. This includes industry-wide financials, averages and upcoming trends  balanced scorecard
Next to costs, we
- Look at market trends: what are our customers willing to pay and does our cost need tot go
down?
- Look at predictors for financial results
- Examine what do we need to achieve on both financials and non-financials in order to realize
our strategy
- Study risk management: which risk factors are we exposed to and how can we manage them?
- Have a long term perspective: not only on current profits, but what about customer life time
value, customer profitability, long term pricing

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Hoorcollege 2
Cost accounting

Wat zijn kosten?

- Resource sacrificed to achieve a given objective
- Usually expressed in monetary terms
- Goal: find out the true costs (e.g. of producing car)  crucial for decision making

Terminology
- Part of cost = giving up an alternative, also called opportunity cost
- Actual vs. budgeted costs (schatting van kosten)

Responsibility accounting
If decentralized organization structure  responsibility centers
Different types of responsibility centers
- Cost center: accountable for costs, bijv. Onderhoud, it-support  ondersteunende diensten,
want ze hebben vaak niet veel te maken met de verkoop maar zijn wel belangrijk
- Revenue center: accountable for revenues
- Profit center: accountable for revenues and costs, bijv. Starbucks
- Investment center: accountable for revenues, costs and investments, bijv. Headquarters

Choice of responsibility centers is based on the controllability principle = keep managers/employees

accountable for the items they can control
Idea: who has the best information/knowledge to explain deviations from targets?
 not: who can we blame for deviations from targets?

Examples:
- Management
- Support staff
- Energy and rent

Cost object
= thing for which cost information is needed
Examples:
- Products or product lines
- Departments or business unit
- Projects or programs
- Service
- Activity or process
- Customers
Depends on individual situation or interest
Cost = Σ monetary values of all resources needed to achieve the cost object = complex
Cost accumulation  stage 1  bookkeeping

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Cost assignment  stage 2  tracing and allocating

Complex: Assigning to departments (cost object) is already difficult, To the product level even more
complex e.g. Philips, Siemens

e.g. IT kosten
verdelen naar HRM,
Dept. Finance,
Accounting,
Economics, etc.

Direct vs. indirect costs

- Related to particular object

- Tracing economically feasible/not
too costly

Related to particular object

-
Tracing economically not
-
feasible/too costly
- Allocation bases on (arbitrary?)
criteria determined by the company
Cost driver  is factor, such as level of activity or the quantity, that causally affects totals cost over a
given time span
Change in level cost driver  change in total cost of cost object Examples: # labor hours, # units,
distance to customer, etc.

Indirect/direct  Depends on cost object. E.g. wage production manager direct if cost object is prod.
department, wage production manager indirect when cost object is product (e.g. car)

Variable vs. fixed costs

Do costs vary proportionally with quantity or are they independent of the quantity?
Time span  classification depends on the time horizon
Costs can be classified as fixed in short run, but variable in the
long run

Relevant range  costs can be variable in a certain range, but

require additional fixed costs when range is exceeded

Product cost vs. period cost

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Cost estimation approaches

- Industrial-engineering or work-measurement method
Step by step monitoring and measuring of inputs
Time-consuming and often not feasible
Bijv. Bij kleine productieprocessen
- Conference method
Use estimations on the basis of analysis and opinions of experts from different areas
Quick but highly dependent of expert’s input
- Account analysis method
Classification in variable, fixed, mixed cost drivers
Theory driven (e.g. contracts as source), but can be subjective
Widely used in practice
- Quantitative analysis (e.g. high-low or regression based)
Data-driven classification
 IV: cost driver
 DV: cost of a cost object

High-low method
a = intercept = approximation of fixed costs
b = slope of the line = variable costs
line tries to explain data in the relevant range of
observations
theoretically, intercept equals fixed costs only when
relevant range includes 0.

Lowest value cost driver (IV)  in welke maand er de

minste producten verkocht zijn
Highest value cost driver (IV)  in welke maand er de meeste producten verkocht zijn
b = (kosten van de meeste maand – kosten van de minste maand) / (highest value cost driver
– lowest value cost driver)
a = kosten van de minste maand – b x lowest value cost driver

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Cost driver:
- All costs dependend on one cost
driver
- Economic sense: most crucial cost
driver, relevance for business
- Multiple cost drivers are often
needed for detailed analysis

Regression method
more accurate and powerfull than HL method

Fixed cost estimate = 39501

Variable cost estimate = 8.7227
Cost function = 39501 + 8.7227 x Q

Cost-volume-profit analyses

We have seen cost structure of firms, CVP-analysis assumes:

- Fixed cost + variable part
- Fixed cost + variable cost per unit x the quantity of cost driver (Q)
In a similar way, CVP-analysis assumes a revenue function:
- Revenue driver = a variable that drives revenues
- Revenue = unit selling price x the quantity of the revenue driver (Q)
Driver Q = often output (quantity): e.g. # tickets sold, # parcels delivereld

Operating profit = revenue – variable costs – fixed costs = (USP*Q) – (UVS*Q) – FC

USP = unique selling price
UVS = unit variable costs
Q = quantity of cost/revenue driver

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Assumptions CVP
- Revenues/costs change due to the same driver = output
- Linear behavior of cost and revenue functions
- Unit variable cost, fixed cost and selling prices are known and are assumed to be constant
- No inventory-levels assumed, all cost and revenuws are added without taking into account
time value for money

Simple planning, first analyses, what-if scenarios

based on
- Historical costs or revenues to make predictions
- Managerial estimates
good for first business planning, less useful for detailed planning

Break-even point
= output level for zero profit
- Method 1: equation method
Revenue – all costs = 0
USP x Q – UVC x Q – FC = 0
- Method 2: contribution method
OP = USP x Q -UVC x Q – FC
OP = (USP – UVC) x Q – FC
Q = (FC +OP) / (USP – UVC)
- Method 3: graphical analysis of break-even point

Target profit
Output level to achieve a given profit objective (target: TOP)
Assume that LG wants to realize a Target operating profit (TOP) of 350,000 euro FC = 1,000,000 euro;
UVC = 100; USP = 200 How much units does it has to sell?

Influence of taxes
Assume 30% tax-rate. Does break-even point for the LG example
changes?
What happens with the number of units that LG needs to sell if it still
wants to earn an after tax result of 350 000 euro

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Other what-if analyses

Effect of price/unit cost changes etc.
How much units do we need to sell for TOP of 350 000 if LG expects:
- A sudden cost increase of 5% in UVC
- A drop in selling price of LG by 10%
- Etc.

 often in spreadsheets

Subcontracting
Effect of alternative cost schemes in contracting
Option 1: an outside subcontractor offers LG to produce the screens at a cost per unit of 130 euro
(fully variable cost structure)
Option 2: an outside subcontractor asks a fixed fee of 2.000.000 per period to meet up the demand of
LG (full fixed fee structure)

What does this mean for the demand risk (volatility) of LG?
Assume that LG has outside contracting options of a fully variable cost structure of 130 $ per unit or
fully fixed cost structure of 2.000.000 and selling price for LG = 200 $ per unit. Which contractor
should it choose, knowing that market for low budget LED TV’s = 9000 units (30% probability) or
19000 units (70% probability)?

General approach = expected values, based on probabilities

- E(OP) under fixed cost structure
(200 x 9000 – 2000000) = - 200.000
(200 x 19000 -2000000) = 1800000
E(OP) = 0.3 * (-200000) + 0.7 * 1800000 = 1200000
- E(OP) using variable cost structure
(200-130)* 9000 = 630000
(200-130) * 19000 = 1330000
E(OP) = 0.3*630000 + 0.7*1330000 = 1120000

Hoorcollege 3
Cost accounting

Job-costing systems = cost objects are individual units, batches or lots of a distinct product or service
 distinct units, services, jobs: hard to standardize
Process-costing systems = cost objects are identical or similar units, products or services
 mass production, easily comparable and easy to standardize
Hybrid systems = combination of job- and process-costing systems

Big, diversified companies often with combination: different tasks/companies require different cost
system approaches

Why are costing systems important?

- Short-term impact
 Price setting
 Inventory management
 Etc.

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- Long-term impacts
 Balance sheet, i.e. on inventory ending balance
 Net income and ratios
o Stock price and firm value
o Cost of short- and long-term debt financing
o Cost of equity
With more product & service diversification and more complex company structures, cost tracing and
allocation becomes more challenging

Job costing
Idea is to assign costs to a specific job
Examples: accounting audit for a firm, construction of an individual house
Steps to cost a job
- Identify cost object
- Identify directs costs of the job
- Trace direct costs to the job
- Accumulate overhead (indirect) costs in cost pools
- Select an allocation base (oorzakelijk verband, verdeelsleutel, bijv. aantal eenheden)
- Calculate the overhead rate per unit or per selected cost driver
- Allocate overhead costs to jobs based on application base (cost driver)

Direct materials and direct labor = tracing = job sheet, time records, bar-coding
Indirect cost or overhead = allocating = difficult to say how much overhead one job takes =
assumptions are needed  cause – effect

Actual costing = we can only allocate if overhead is known (end of period)

Normal costing = we assume a budgeted amount of overhead and a budgeted amount of a cost driver
to cost for jobs during a period
We can cost for overhead, before actual amount is known  timely information for pricing, bidding
Problem  when actual overhead comes in, we may have too little or too much overhead allocated
Variance = under or over absorbed/allocated overhead

Reasons over/under-allocated costs

Nominator = overhead cost pools not well budgeted
Denominator = use of cost driver not well estimated
Solutions
- Recast all jobs with actual overhead rate
- Prorate difference to WIP, FG, COGS-account
- Write-off from COGS

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Process costing
Production costs assigned to many units of identical or similar units, products or services
mass production, easily comparable and easy to standardize (specific products and industries)

Process-costing (mass production):

- Tracing and allocating to unit-level not feasible
- Cost assigned to products once per period
- Extreme averaging  DM + conversion costs (= DL + OH)
How do you deal with unfinished goods?
Derive an output unit taking into account a product’s WIP status
 two one-half completed products are equivalent to one completed product

When no opening, but closing stock of WIP in inventory

 use equivalent units (EU)
Steps
- Calculate EU
- Calculate production costs (material cost/unit and conv/unit)
- Calculate WIP, FG accounts (inventory)

When WIP at both the start and end of the production period
weighted average (WA) vs. FIFO
Cost flow assumptions
- WA
 Focus on work done to date: more averaging
 Equivalent units of finished and unfinished products treated equally
- FIFO
 Finish first the WIP in opening stock
 All new products produced after
 Separation of old and new products
What does this mean?
- COGS and inventory affected
- Costs can be shifted and cost rates can be affected
Why could this matter?
- Targets, performance evaluation and performance-based pay
- Profit and tax determination

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Weighted average/ FIFO steps

1. Physical units
2. Equivalent units
3. Compute equivalent-unit costs
4. Summarize total accounts
5. Assign costs to units completed and closing WIP
Differences between calculations with effects on income and inventory

Hoorcollege 4
Cost accounting

Standard costing
Setting standards (budgets) for quantities of inputs simplifies costing process. Assume that costs per
equivalent can be reliably computed in advance and then be used: standard costs
Standard (budgeted) rates: e.g., for DM and conversion
- More efficient and timely (e.g. used for pricing)
- Less accurate (e.g., better use actual costs to determine profits and evaluate performance)

Job-costing & process-costing

Transferred-in costs
- More than one operating division: units can move from division to division
- Costs are also transferred: transferred-in costs
- Costs in one division affect costs of the next division: impact for performance evaluation?
- Transferred-in costs treated as a separate type of DM added in the beginning

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Joint costs
When a production process leads to the creation of many products:
- Dairy firm: raw milk  cream butter
- Oil refinery: crude oil  LPG, gasoline, diesel
- Chicken farm: chicken  wings, drumsticks, weaste
Joint costs (JC): costs of single production process that yields multiple products
Split-of-point: the place in the production where two or more products become separately
identifiable
Separable costs: all cost incurred beyond the split-off point which are assignable to each of the
separated products

Joint cost allocation arbitrary/with a lot of discretion. Hard to get a good cause-effect relationship.
Problem: joint cost allocation and loss making products The choice of the method of joint costs
allocation should not impede otherwise beneficial future decisions, e.g. selling or further processing
decisions (e.g. sunk costs)

Allocation methods

Physical measures
Allocation of JC to men perfume:
(5000)/(5000 + 10000) * 270000 = 90000

Sales value at split-off point

Allocation of JC to men perfume:
(20*5000)/(20*5000 + 30*10000) * 270000 = 67500

Net realizable value

Eternity for men: 5000 * (40-16) = 120 000
Eternity for women: 10000 * (45-15) = 300 000

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JC for eternity for men:

120000 / (120000+300000)*270000 = 77000

Constant gross margin

Overall gross margin: (270000+5000*16+10000*15)/(5000*40+10000*45)= 77%, GM = 23%
Determine target COGS of each product: 77% *(5000*40) = 154000; 77% *(10000*45) = 346500
Deduct separable costs from target COGS: 154000 – (5000*16) = 74000; 346500 – (10000*15) =
196500  total is 270000 approximately

Accounting for by-products

By product
- Low sales value in comparison to main product
- Often sold in other markets than main product
How to account for this?
- No allocation of joint costs to these products
- Deduct sales value of by-product from production cost or recognize it as extra revenue item
- By-product is stocked or not stocked (recognized at production time or at selling time)
Scrap = very little sales value
Waste = no sales value at all

Comparison of methods
- Cause-effect-relation difficult
- Benefits received from product are often good criteria
 Sales at split off or NRV (both also with meaningful, common denominator)
 Sales value at split off simpler and it does not anticipate future decisions
 Physical measures may be good cost driver and available when prices are hard to use
- Different joint costs allocation methods have different costs of information gathering and
accuracies of measurement
- Careful:
 The choice of the method of joint costs allocation should not impede otherwise
beneficial future decisions, e.g. selling or further processing decisions (sunk costs)
 Transferred goods between different departments

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Hoorcollege 5
Cost accounting

Allocation methods

Direct method
Widely used, ignores mutual
services between supporting
departments

Je deelt bijvoorbeeld het aantal

computers in gebruik door het
totaal aantal computers (cost driver)
, dus 30/70 en dan keer de kosten.

Step-down method
Partly recognizes mutual services, requires ranking of support departments
If S1 is ranked first, S1 costs allocated to S2, O1, O2
Then S2 costs allocated to O1 and O2
Rangschikking zou kunnen op basis van meeste diensten, het duurste, etc.

In dit geval op basis van aantal computers. Dus eerst IT, dan HR, ACC, FIN

Reciprocal method

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Simultaneous allocation of costs to all departments

Recognizes all mutual support services

Single vs. dual rates

Dual rate = indirect costs split into fixed and variable
Single costs = indirect costs pooled together (fixed + variable)
Single rate could induce bad management decisions
- Single rate looks like variable costs to department managers
- Department managers might prefer to buy outside (if outside rate < single rate)
Dual rate could reflect different cost behavior and focus on overall firm

Activity based costing

Traditional costing
Often one single cost pool for plant-wide overhead
Allocation base often volume driven (based on direct cost)
- Input related = # of machine hours, labor hours, total DL cost
- Output related = # of units produced, nr. Of units sold
Frequent problems
- High volume, simple products: overpriced / over costed
- Low volume, complex product: under costed / underpriced
- Product subsidization: few products sponsor many loss products

Refining a costing system

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Shortcomings of traditional costing become more prevalent

- Increasing product diversity
- Due to increasing technology: a lot of costs are indirect (overhead)
- Advances in information technology
- More competitive markets
Costing systems can get refined
- Increase direct cost-tracing
- Increase indirect cost-pools (until the pools are very homogenous)
- Use different cost-allocation bases (cause-effect-criterion)
Prominent example: activity based costing (ABC)

ABC
Goal: better cause-effect relation
between costs and products
Refined costing should yield more
detailed cost information

Cost hierarchy
A cost hierarchy categorizes costs into different cost pools on the basis of the different types of cost
driver or different degrees of difficulty in determining cause-and-effect relationships
Typically 4 levels

Evaluation of ABC
Advantage: more accurate, better informed decision-making
- Pricing decisions: what prices do we need to set to be profitable?
- Product (mix) decisions: which products/services should we make? Which production steps
are value-adding
- Cost reductions: where and how can we save costs by improving the production process
Disadvantage: complexity and implementation costs

Indicators to switch to ABC

- Significant amounts of indirect costs are allocated using only one or two cost pools.
- All or most indirect costs are identified as output-unit-level costs (i.e. few indirect costs are
described as batch-level, product-sustaining or facility-sustaining costs).
- Products make diverse demands on resources because of differences in volume, process
steps, batch size or complexity.

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- Products that a company is well suited to make and sell show small profits, whereas products
that a company is less suited to produce and sell show large profits.
- Complex products appear to be very profitable, and simple products appear to be losing
money. Related: winning of auctions for complex, losing of auctions for simple products -
Competitors’ prices appear unrealistically low
- Operations staff have significant disagreements with the accounting staff about the costs of
manufacturing and marketing products and services.

Hoorcollege 6
Cost accounting

Product costs vs. period costs

Variable vs. absorption costing

Central is the treatment of fixed manufacturing costs
- Allocated fixed manufacturing costs to products  absorption costing
- Allocated fixed manufacturing costs to periods  variable costing
Absorption costing: focus on business function (manufacturing vs. non-manufacturing)
- Product costs include fixed and variable manufacturing costs
- Period costs include non-manufacturing costs
- GAAP, IFRS require absorption costing
Variable costing: focus on cost behavior (variable vs. fixed)
- Product costs include only variable manufacturing costs
- Fixed manufacturing costs are expensed  treated as period costs
- Used for internal decision-making
Implications (earnings management)
- Impact on net income and balance sheet
- Manager behavior may differ between variable and absorption costing

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Absorption costing
Product cost = all manufacturing cost = DL + DM + VarOH + FixOH man  included in production costs
and inventoried
Period cost = all non-manufacturing cost (=marketing)  expensed

Variable costing
Product cost = only variable manufacturing cost = DL + DM + VarOH  included in production costs
and inventoried
Period cost = all non-manufacturing cost + FixOH man  expensed

Differences in profit depends on dynamics in FG stock

- If FG increase (stock is being built up), then ProfitVC < ProfitAC
Fixed manufacturing costs moved into FG stock
- If FG decrease (stock is reduced), then ProfitVC > ProfitAC
Fixed manufacturing costs moved out of the FG stock into COGS

Differences in income statement format

Management incentives
Absorption costing with incentives to overproduce to reduce unit costs: form of real earnings
management
Methods to reduce this…
- keep track of stock building (closing stock t/closing stock t-1)
- switch to variable costing
- longer time period to evaluate managers
- Careful budgeting (budgeted production figures)
- JIT-production, non-financial performance evaluation

Absorption costing under normal/standard costing

budgeted
Allocation rate (OHR) = ¿ overhead costs ¿
quantity of allocationbase ( ¿ denominator )
Different denominators possible
- Supply driven
 Theoretical capacity: what output can we produce?
 Practical capacity: what output is practically achievable (maintenance, shifts)
- Demand driven
 Normal utilization: what output is normally needed given customer demand?
 Master-budgeted utilization: what is needed to meet our budget targets?
- Different denominators with different allocation rates
 Impact on income and balance sheet
 Variation in income
 Extra reconciliation in income statement when actual output deviates from
denominator level

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 Denominator level may raise questions with tax authorities, auditors

No denominator level effects under variable costing (As fixed cost are expensed)

Comparison of costing methods

- Benefits of absorption costing for external use
GAAP / IFRS requirements
- Benefits of absorption costing for internal use
Long-run decision might be easier: fixed costs need to be recovered through prices. Same
costing as for external use (also easier to communicate)
- Benefits of variable costing for internal use
 Variable costing is closer to cost behavior (fixed vs. variable costs) → short-term
decisions
 CVP-analysis only depends on contribution (selling price – variable cost per unit)
 Variable costing is not affected by denominator level decisions
 Decision-influencing perspective: no incentives to build up stock to change operating
income

SEC vs. Bristol-Meyers: agency conflict

Managers took actions (excessive inventory) to meet internal targets and external expectations
(earnings management)
Agency conflict: Investors (principals) versus managers (agents)
- Principal needs to delegate and give up power: agent should pursue principal’s interest
- Agents have more knowledge or specific skills, but own interests:
 More money > less money
 Leisure > work (effort)
 Principals need to buy work (effort) from agents
- Agents might use advantage against principals’ interests
- Principals should be aware of this conflict and take countermeasures

Hoorcollege 7
Planning & control

Decision control
Management control  towards goals
- Translate plans into concrete actions  budgets, responsibility centers
- Deviations of operations against original plan  variance analyses, BSC
- Performance management and evaluation  bonus / compensation

Budgets
Budget = the quantitative expression of company’s action plan
Master budget includes operating and financial planning
- Operating planning: how to use (scares) resources
- Financial planning: how to get fund to acquire resources
Typically for one year period  sub-periods (month, quarter) rolling budgets (continuous updating)
Summarized in a set of budgeted financial statements
Management tool for planning and controlling

Master budget
Quantify and operationalize company’s strategic goals
Encourage planning  management must look ahead
- Overcome past misallocations and sub-standard performance

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- Incorporate future changes

Provide performance criteria  motivation
Promote coordination and communication  goal congruence
- Coordination: balancing of all factors of all the departments to meet strategic objectives 
all work towards the same end
- Communication: getting those objectives understood and accepted by all the employees

Budgeting cycle
- Planning the performance of the organization
- Providing a frame of reference = a set of specific expectations against which actual results are
compared
- Investigating variations
- Correcting action
- Planning again

Operating budget
- Supporting budget schedules
- Revenue budget
- Production budget in units
- Direct materials purchase budget
- Direct labor budget
- Cost of goods sold budget
- Non-manufacturing cots budget
operating income  budgeted P&L

Financial budget
Capital budget = which long-term projects to finance
 identify investments  choose investment  follow-up
Cash budget = when we are short (rich) of cash
 available cash = beginning cash balance less min cash balance

Master budget approaches

Computer-based financial planning models: what if?
- Models inter-relationships among depts
- What if selling price drops to …
- Etc.
Kaizen budgeting = incorporates continuous improvement into the budget numbers during the
budget period
Activity-based budgeting (ABB)
- Focuses on the budgeted cost of activities
- Forecast production volume  activities  costs

Responsibility accounting
System for evaluating the performance of managers based on activities under their supervision
Responsibility centers
- Cost  responsible only for costs
- Revenue  responsible only for revenues
- Profit  responsible for revenues, costs, profit
- Investment  responsible for revenues, cost, profit and investment
 controllability

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A controllable cost/revenue/subject to the influence of a given responsibility center manager for a

given time period  performance measurement: exclude all uncontrollable costs from a manager’s
performance report

Hoorcollege 8
Planning & control

A budget is the quantitative expression of a company’s action plan

Variances
Budgeted result  actual result
Variance is favorable (F) or unfavorable (U)

Connection to responsibility centers

Assignment of Responsibilities
- Controllability Principle : Variances can suggest questions and direct attention Feedback can
be used to make necessary adjustments
- Also: best knowledge to understand and explain (un)favorable variances?
 E.g. unfavorable sales volume variance: sales manager • Low work effort or
recession?
 E.g. favorable DM price variance: purchase manager
o Larger quantities (mass discounts) & effective negotiations
o Favorable market price changes
o Lower quality inputs
 E.g. unfavorable DM efficiency variance: production manager
o Insufficient training of employees
o Low quality of materials causes a lot of rework
Conflict of interest can arise:
- Purchasing manager with favorable variance (cheaper input)
- Production manager with unfavorable variance (lower quality input → higher production
costs)

Variances overview

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e.g. done for production budget (DM budget, DL budget, production overhead budget)

Static budget variance (level 0 and 1)

Splitting the static budget variance

Let’s start by singling out the sales effects

- Develop a flexible budget
- Start with the amount of units sold

Sales volume variance and flexible budget variance (level 2)

Analysis more information on level 2: price and costs variances visible

e.g. selling price variance: (act. Price – bud. Price) * act. Units sold  Pv = (Pa-Pb) * Qa
Pv = (125 – 12) * 10000 = 5000 F

Price and efficiency variances (level 3)

Price variance: how did prices of inputs deviate from expectations  (act. input price – bud. input
price) * act. quantity of input  Pv = (Pa – Pb)* Qa

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Efficiency variance: how much input should have been used for output  (act. quantity of input –
bud. quantity of input for act. output) * bud. price of input  Ev (or Qv) = (Qa – Qb )* Pb
Qb = budget quantity of input for actual output)
Variable overhead variances
Level 0 and level 1: static budget variance

Flexible budget level 2

- Calculate the budget overhead rate: €30 ’000 / 4’800h = €6,25 per hour (budget labor cost
per DLH)
- Calculate standard (budget) input (DLH) per unit : 4’800h / 12’000 = 0,4 DLH per unit
- Flexible budget: budget direct labor hours for actual production =budget input per unit *
actual units 0,4 DLH per unit * 10 000 = 4 000 DLH for actual production
- Flexible budget Variable manufacturing OH cost = budget direct labor hours for actual
production * overhead rate: 4 000 DLH * 6,25 = 25 000

Sales-volume var.:€ 5’000 (F) = ( 6,25 * 4 800) – (6,25 * 4 000)

Flexible budget var.: €3’700 (U) = (6,25 * 4000) – (7 * 4100 )
Static budget variance: 30 000 – 28 70 = €1’300 (F)

Spending variance and efficiency variance level 3

Spending variance Pv = (Pa – Pb)* Qa ; Pa = actual OHrate and Pb = budget OHrate

(act. input price – bud. input price) * act. quantity of input (7 – 6,25 ) * 4’100 DLH = €3 ’075 (U)
Efficiency variance Ev (Qv) = (Qa – Qb)* Pb
(act. quantity of input – bud. quantity of input for act. output) * bud. price of input (4’ 100 – 4 ’000) *
€6,25 = €625 (U)

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Interpretations
- Spending variance is about the prices of the overhead costs (similar to price variance)
- Efficiency variance is about the efficiency of the use of the cost allocation base
Fixed overhead variances
There is no ‘flexing’ of fixed overhead costs

There is no sales-volume variance of fixed overhead costs  budgeted fixed costs are unaffected by
volume changes
There is no efficiency variance  a manager cannot be more or less efficient in dealing with a given
amount of fixed costs
On level 3, the flexible budget variance = spending variance

But there is a new kind of variance for fixed overhead  production-volume variance

Production-volume variance
Over- and under-allocated costs
- Under absorption-costing, fixed overhead is allocated to products during the year
- A rate is derived from budgeted fixed costs and budgeted volume at start of the period
- If budgeted volume is missed, costs can be over-/ und
- er-allocated

Example: labor hours as allocation base for fixed overhead

- JAN 2020: rate = 25’000 / 4’800 = 5,2083 per labor hour
- DEC 2020: 5,2083 * 4 000 = 20’833 overhead allocated at end of year (flexible budget units *
bud. rate)
- However, budget was 25’000 of fixed cost (regardless of volume)
- Production-volume variance = bud. fixed OH – allocated fixed OH = 25’ 000 – 20 ’833 = 4’167
(U)

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Summary overhead variances

Under- or overallocated (absorbed) overhead = 3’075 + 4’167 + 625 – 1’000 = 6’867 (U)
Double check: compare actual costs with costs allocated to products
- Actual manufacturing OH = 28’700 (variable) + 24 ’000 (fixed) = 52 ’ 700
- Manufacturing OH allocated = 25 ’000 (variable) + 20 ’833 (fixed) = 45 ’833
- Difference: 6’867 (U)

Mix and yield variances level 4

First step: Calculate efficiency variance Ev(Qv) = (Qa – Qb)*Pb

- Oranges: (1’ 000 – 975) * 1,00 = 25 (U)
- Grapefruits: (600 – 525) * 0,80 = 60 (U)
- Total efficiency variance = 85 (U)
Problems
- We used a different mix than standard mix
- The output (yield) used more inputs than standard
- Further split of efficiency variance needed: mix (1) and yield (2) variance

Mix variance: ∑ [( act. mix % - bud. mix % ) * act. total quantity * bud. price]
- Oranges: (0,625 – 0,65) * 1’600 * 1,00 = 40 (F)
- Grapefruits: (0,375 – 0,35) * 1’600 * 0,80 = 32 (U)
- Total mix variance: 8 (F)
Yield variance: ∑[( act. total quantity – bud. total quantity) * bud. mix % * bud. price]
- Oranges: (1’600 – 1 ’500) * 0,65 * 1,00 = 65 (U)
- Grapefruits: (1’600 – 1 ’500) * 0,35 * 0,80 = 28 (U)
- Total yield variance: 93 (U)

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Sales side variances

Split of Sales-volume variance in Sales-quantity variance and Sales-mix variance
- Sales-quantity variance  Focus on difference between budgeted and actuals good sold (use
bud. mix and bud. prices)
- Sales-mix variance
 Focus on differences between budgeted and actual mix (use act. goods sold and bud.
prices)
 Imagine composite product unit: hypothetical product according to the mix of
products
Split of Sales-quantity variance in Market-size variance and Market-share variance
- Market-size variance
 Change of market-size responsible for Sales change (size of the pie)
 Focus on difference between act. and bud. market size (use bud. market share and
bud. price)
- Market-share variance
 Change of market share responsible for Sales change (share of the pie)
 Focus on difference between act. and bud. market share (use act. market size and
bud. price)

Why and when

Why
- Learn about operations and promote organizational learning
 Use the knowledge to improve or emphasize learning
 E.g. improve delivery process or material quality to enhance efficiency
- Learn about manager decisions and capabilities and evaluate performance
 Controllability?
 Financial and non-financial measures
 Keep dependencies in mind
When
- Not all variances are investigated
- Management by exception  focus on areas that do not operate as expected (problem
areas)
- Materiality principle
 Rules of thumb: company- and case-specific
 E.g. investigate all variance > 5000 or 25% of budgeted costs

Hoorcollege 9
Decision making

Decisions like:
- One-off special orders
- In- or outsourcing of products (make or buy)
- Decide on product mix under
capacity constraints
- Customer decisions (add/drop
or different prices)

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Relevant costs and revenues

In making these decisions not all costs and revenues are relevant. Only expected future costs and
revenues that differ across alternative courses of action are relevant  costs that make a difference
to the decision
- Past (historical) costs are often irrelevant: cost of investments (depreciation), buildings,
machinery  often sunk costs
- Future costs: opportunity costs can be relevant
Unit cost data can be misleading
- When irrelevant costs are included in unit costs
- Unit costs at different output levels are used to choose among alternatives

One-off special order

Example: Holiday Ice produces ice cream in the Netherlands. One of the production installations
burnt down last week  Production volume for the next 2 months (April & May) is reduced by
100000 liter ice cream. To keep position on Dutch market  buy & pick up ice cream abroad, and sell
under own brand name (paste sticker with brand name on plastic boxes of supplier). Ice producers in
Belgium, France and Germany can do an offer (=set price) for delivering this 100 000 liter

Ysco from Belgium does an offer:

Ysco produces 500.000 liter/month in
April & May Total production capacity is
800.000 liter/month (summer)

Only relevant costs should be taken

into account
Relevant costs = all costs that change if
the order is accepted

In- or outsourcing of products (make or buy)

Steven Bikes gets an offer from an external
supplier: 8000 shifters at 19 euros each
Should Steven Bikes stop producing the
shifters internally (make) and buy them
from the outside supplier (outsourcing)?

Opportunity cost of a given decision =

monetary value of the best foregone
alternative
If no alternative use of space 
opportunity cost = 0
If freed-up space can be used to produce
new type of bike (operating profit of 60000)
 opportunity cost make = 60000
Total cost make = 112000 + 60000
Total cost buy = 152 000

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Direct labor cost = variable; can we reassign workers (Y/N?) outsourcing means loss of jobs!
Ethics  meets  costs
Outsourcing
PRO’s CONTRA’s
Profit from lower production costs due to Propriety costs
competitive advantages of suppliers
Location (e.g. lower wages) Dependencies (e.g. loss knowledge/expertise
that cannot easily be reactivated)
Skills (more advanced technology or knowledge) Local/communal responsibility: can mean laying
off employees
No fixed costs in own books Employee identity and corporate culture
Leaner production Reputation risks
Focus on core activities and strategic strengths Quality concerns

Total quality management (TQM)

Quality as a way to guarantee customer satisfaction (which increases sales). Quality is a competitive
advantage: reduces costs and increases revenues
2 basic aspects of quality:

Costs of quality
Develop financial and non-financial measures to monitor conformance quality and design quality 
analyze ABC of quality

Decide on product mix under capacity constraints

Decide how to use constrained resources (theory of constraints = TOC)

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Decide how to use constrained resources

- Product mix and capacity constraints
- Multiple part products processed on different machines

Emphasize this model  yields the max.

k operating profit
Contribution per product is irrelevant item
Contribution per constrained resources is the relevant item for decision making information

Contribution margin per unit of constraining factor

Stitching machine is available for 12 000 minutes per month  BOTTLENECK

Production of TP? Production of BP?
Monthly demand for TP 7 000 units
Total stitching time required for TP = 7 000 x 1min. 7 000 min.
Remaining stitching time available = 12 000 – 7 000 5 000 min.
Production of BP = 5 000 / 2min 2 500 units

Throughput accounting
Relief constraints on bottleneck operations
- Additional machine
- Outsourcing
Actions
- Are more important if focused on the bottleneck

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- Compare increase in throughput contribution with additional costs

Focus on constrained resources = important

Theory of constraints
More throughput is often more money
The management accountant plays a key role by
- Calculating throughput contribution
- Identifying relevant and irrelevant costs and
- Doing a cost-benefit analysis of alternative actions to increase efficiency and capacity

Theory of constraints
= A technique where the primary goal is to maximize throughput while simultaneously maintaining or
decreasing inventory and operating costs
Theory of constraints analyzes production through a series of steps.
1. Identify the system constraint
Is the constraint internal, for example, in production, engineering or planning? Is it external,
for example, in the market?
2. Decide how to maximize the output from the constraint
Once a constraint has been rectified, go back to step one to identify the next most serious
constraint and repeat.
3. Subordinate everything else to the decisions made in Step 2.
The main point here is that the production capacity of the bottleneck resource should
determine the production schedule for the organization as a whole.
4. Elevate the system’s bottlenecks
Take actions to increase bottleneck efficiency and capacity. The objective is to increase
throughput contribution minus the incremental costs of taking such actions

Customer decisions (add/drop or different prices)

ABC on customer level: resources  customer activities  cost object: customer
Customer costs = product cost + other costs based on the activities customer consume (order
placement, packaging, delivery, after-sales support)

Recap
- Always compare the alternative course of action (make or buy, accept offer yes or no)
- Consider the incremental costs or savings! Cost and revenues that are relevant to the
decision 
- Are there any opportunity costs (e.g. not producing means freed-up capacity: can be
lucratively used for other things)
- Most of the time fixed (past) cost are irrelevant (e.g. regardless whether we produce or not,
plant facilities are there  sunk cost; they do not differ across alternatives)
- Be careful of fixed cost allocations, have to be spread on existing customers/products if one
customer or product is dropped

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Hoorcollege 10
Decision making

Price decisions
What price to charge for the products / serviced delivered by
the firm?  one of the most difficult business decisions.
- Price should not be too high
- Price should not be too high
P  marginal revenue = marginal cost
Why not using this method?
- Companies do not have information about marginal
costs because
 Marginal cost function is too difficult to estimate
 Too expensive to gather all the data for estimating the MC function
- Assumes that the company has perfect information about supply and demand curve
Pricing based on cost information is second-best

Major influences on pricing decisions

Pricing decisions depend on business context (3 C’s: costs, customers, competitors), time horizon, etc.
Determine relevant costs for pricing decision  determine time horizon
- Short-run pricing focuses on covering variable costs (often manufacturing costs)
- In the long run, you also want to cover your fixed costs

Costing and pricing for the long run

Depending on market/type of product
- Market-driven approach: given what customers want and our competitor’s actions, what is
the target price that we should charge? P is given, work out reasonable cost
Target costing and pricing:
1. Determine customers’ needs for product
2. What is customer willing to pay = target price
3. Target price – desired profit = target cost
4. Perform value engineering to achieve target cost
- Cost-based approach: what is the cost of production (full-cost) and what should we charge to
recover our costs and to achieve desired profit?
Cost-plus pricing
1. Determine a cost-base (full cost, var.)  X
2. Desired mark-up (derived from ROI)  Y
3. Selling price  X + Y
Four cost bases:
 Absorption manufacturing cost
 Total cost
 Variable manufacturing cost
 Total variable cost

Market-driven approach
Market price – desired profit = target cost
Value engineering: what do customers really want?  reduce value-added costs and eliminate non
value-added costs

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- Locked-in costs (=designed-in costs)  focuses on the moment when the decision is made
that a cost will be incurred in the future
- Cost incurrence

 Focuses on the moment when the cost is used up, when the company has to pay for
it
 Costing systems emphasize cost incurrence
Potential problems with value engineering:
- Risk that cost reduction leads to quality decreases
- Proceeds with cross-functional teams (development time, language, bonus, …)

Cost-based approach
Price = cost + (markup percentage * cost)
How to determine the mark-up?  use target rate of return on investment
- Sometimes difficult to determine the invested capital
- Determine mark-up based on different cost bases
 Variable manufacturing costs
 Variable product costs lower mark-up
 Full product costs percentages
- Benefits of including fixed costs in the cost base
 Full product cost recovery
 Price stability
 Simplicity
Disadvantage of including fixed costs in the cost base
Example Toyota
Suppose:
- Produce and sell 9 000 000 cars per year
- Manufacturing costs / unit = € 20 000 / unit
- Sales and marketing costs = €40 500 mio / year  €4 500/unit
- Price > € 24 500/unit
Change in supply of cars: Stop producing diesel cars end 2018
Consequence:
- Produce and sell 7 000 000 units per year
- Manufacturing costs / unit = € 20 000 / unit
- Sales and marketing costs = €40 500 mio / year  €5 785/unit
- Price > € 25 785/unit
Price increases  Demand decreases  Sales fall … Price increases…
Supply-driven versus demand-driven death spiral
 fixed costs do not change with volume changes

Transfer pricing
TP as part of management control systems
Transfer pricing = internal price between divisions (buy and sell from each other)
= especially in decentralized firms
= part of a management control system
TP from the selling division to the buying division is not recorded in the company’s income statement.

Centralization vs. decentralization

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Disadvantage of decentralization = Goal incongruence / Imperfect coordination

Divisions optimize at sub-unit level  Not always optimal for firm as a whole
Transfer price =
1. Solution to control/goal congruence problem in decentralized firm  achieves better
coordination = main purpose
2. Performance evaluation of divisions as profit centers

A firm produces and sells products in a market. The firm is centralized and top management makes all
decisions. Revenue and cost functions are given:
R(Q) = Q * (100 – 2Q)  random functions for revenues and costs based on quantity Q in
C(Q) = Q2/2 centralized firm
At which Q is profit maximized?  take first derivative of profit function = revenue – costs
Maximize (100Q – 2Q2) – Q2/2
d/df [(100Q – 2Q2) – Q2/2] = 0
100 – 4Q – Q = 0
Q = 20
 Q = 20 gives maximum profit level (given this R & C function) in centralized firm

Sales may want to maximize revenues solution?

Assume here that this is profit center. Max profits is goal here in this department. But no TP here.
Maximize Q(100 – 2Q)
d/df [Q (100 – 2Q) ]
100 – 4Q = 0
Q = 25  not in line with company policy, department wants Q = 25, centralized firm wants Q = 20

This department
has to take into
account the TP
received from the
other dep. (20Q =
revenue)

TP lead to goal congruence  transfer pricing = coordination

Other advantages: both units can be evaluated as profit centers (self-regulated), units are aware of
costs (production is not free)

Methods of transfer pricing

Transfer pricing =
- Coordination mechanism in decentralized firms
- Motivation for internal trading
- Minimal price: marginal cost (often unknown)
General rule  TP = incremental cost + opportunity cost of goods transferred

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Approximations:
1. Market based
2. Cost plus
3. Negotiated
Different effects on goal congruence, motivation and effort. Variations in profits at divisional level

Market-based transfer pricing

- Assumes that the intermediate market is perfectly competitive
- Promotes efficiency and motivation to control cost for selling department (If cost is lower
than market price  profit)
- Sometimes TP together with opportunities to trade outside
 If TP > market P  buying department goes to the market
 If TP < market P  producer can better sell in the market  Internal trade occurs at
market P (goal congruence)
- Disadvantages
 For many products, no market available (e.g. unfinished goods)
 If internal producer is more expensive: Do we buy everything from an external
producer
 Profits fluctuate among divisions depending on market price (motivation drops,
manager’s bonus is unpredictable)

Cost-based transfer pricing

Trading at full cost (often with a mark-up)
- Fixed cost of production department is covered
- The producer is motivated to produce, he has always a profit
- Less motivation for buying division as they bear the cost of production inefficiencies
(producer will do less effort to control cost)
Other disadvantages
- Unreasonable end prices are possible (if multiple departments add a mark-up)

- In case of free capacity  full cost?

Solutions:
 Variable cost: production’s FC are not covered
 Dual TP: full cost for production, variable cost for sales, difference is for corporate
level

Negotiated transfer pricing

Transfer price is the outcome of a bargaining process between selling and buying divisions
- Emphasizes autonomy of the divisions
- Interesting if no market is available
Disadvantages
- Time-consuming
- Bargaining power of one party may lead to unfair transfer prices

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- Central intervention often needed if parties fail to agree

- Communication mode influences the fairness of the outcome
Transfer pricing and taxes
- Transfer pricing is one of the most important issues in international tax.
- Transfer pricing is not illegal. What is illegal is transfer mispricing, also known as transfer
pricing manipulation.
- It is estimated that about 60 percent of international trade happens within, rather than
between, multinationals: that is, across national boundaries but within the same corporate
group.
- Estimates vary as to how much tax revenue is lost by governments due to transfer
mispricing…

Transfer pricing in an international context

- Tax is also an important determinant of the transfer price, but not always in line with the best
transfer price from a control perspective
- Dual pricing system (one for tax purposes, one for control)
- Many international rules try to prevent it

Transfer mispricing
Based on US import and export data (2001), the authors found several examples of abnormally priced
transactions: Some examples:
- toothbrushes imported from the UK for $5,655
- flash lights imported from Japan for $5,000
- cotton dishtowels imported from Pakistan for $153 each
- car seats exported to Belgium for $1.66 each

Hoorcollege 11
Operating as independent parties Operating as related parties

New pricing for tax avoidance

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Latest developments: taxation and profit shifting between tax jurisdictions

BEPS action plan

1. address the tax challenges of the digital economy
2. Neutralize the effects of hybrid mismatch arrangements Action
3. Strengthen CFC rules Action
4. Limit base erosion via interest deductions and other financial payments Action
5. Counter harmful tax practices more effectively, taking into account transparency and
substance Action
6. Prevent treaty abuse Action
7. Prevent the artificial avoidance of PE status Action
- Assure that transfer pricing outcomes are in line with value creation
 Action 8: Intangibles
 Action 9: Risks and capital
 Action 10: Other high risk transactions + low value-adding transactions
11. Establish methodologies to collect and analyze data on BEPS and the actions to address it
12. Require taxpayers to disclose their aggressive tax planning arrangements
13. Re-examine transfer pricing documentation
14. Make dispute resolution mechanisms more effective
15. Develop a multilateral instrument

State aid and its link with transfer pricing

- State intervention used to promote a certain economic activity
- More favorable treatment for certain economic sectors, regions or activities
- Distortion of competition
- Selectivity/discrimination

Hoorcollege 12
Management control

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Purposes of performance measurement

Performance measures are central part of a management control system
- What is the performance of a subunit / division manager or CEO?
- Aim: motivate people to work towards organizational goals (e.g. profit)

1. Decisions like bonus and salaries for individual managers

2. Performance comparisons across divisions evaluated as profit centers
3. Future resource allocations and evaluation of investment decisions
 Metrics should achieve goal congruence = subunit / division should take actions / investments in
line with organizational goals

Different financial performance metrics: ROI

income
Return on investment (ROI) =
investment
Properties:
- How much do you earn on resources invested in a subunit?
- Acc. rate of return, compared against average investment return elsewhere
- Income = net profit or operating profit / investment = often total assets
r e venues income
 often split up  ROI = x
investment revenues

Using assets to generate revenue generated income per euro of revenue

 assets/investment turnover  return on sales (ROS)

Assume ROI comparison across sub-units

- ROI division A (17,5%)
- ROI division B (10,75%)
What actions could division B do to improve ROI?
- Desired actions
- Dysfunctional
Division A: opportunity to invest in a machine generating a profit of 300000. The machine costs 2
million. Is this optimal at company level?
ROI company:
- Old: 0.13
- New: 0.135
ROI div A:
- Old: 0.175
- New: 0.1625
 ROI machine = 0.15

Disadvantages of ROI
- Focus on a ratio, is optimizing the ratio, general trend to disinvest: reduce the asset base
(dysfunctional) will increase the ratio
- Expensive investments are not undertaken (assets increase), LT-effect?
- Goal congruence is not achieved, sometimes new investments on a subunit level are not
beneficial to the subunit, but are beneficial from a company viewpoint
Solutions: residual income and economic value added

Residual income

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= income – required euro return on investment = income – RRT(%) x investment

Economic value added

EVA = after tax profit – [WACC x (total assets – current liabilities)]
debt equity
WACC = ∗C oD∗( 1−t axrate )+ * CoE
d ⅇ bt +equity debt +equity

EVA focus on true/economic profit

- Improved version of residual income
- Focus is on economic profit = profit adjusted for accounting distortions
- Corrections to profits from books
Idea: you only make money, if after tax economic profit > cost of debt and equity

Conclusions
Different measures may lead to different conclusions regarding the performance of a subunit. EVA
and RI have less goal congruence problems than ROI.
EVA:
- Only measure focusing on after-tax profits
- Takes into account different sources of funding: debt and equity
- EVA is difficult to calculate: WACC, adjusting bookkeeping profits to ‘economic’ profits is not
easy to do

Lonen van TOP management

bij het bepalen van de hoogte van de lonen, vergelijken bedrijven zich met peer groups
(=benchmarking).
Primairy peer group = bedrijven die in een zelfde soort industrie werken
Secondary peer group = bedrijven die iconische merknamen hebben, maar niet in dezelfde industrie
werken

Publicatie van peer groups is in VS sinds 2006 verplicht

Doel?  meer transparantie omtrent het bepalen van compensatie moet leiden tot correctere top
beloning (specifiek: info over bedrijven die gebruikt worden als benchmark)
Voor 2006: bedrijven selecteren peers met hoog betaalde CEOs als benchmark  SEC willen dit
opportunistisch gedrag die té hoge lonen veroorzaakt aanpakken
Werkt dit echt?  onderzoek van Faulkender and Yaung (2012)
Ook na het invoeren van de wetgeving (in de VS) die het publiceren van de compensation peer group
verplicht maakt, worden bedrijven met zeer hoge CEO lonen in de peer group opgenomen 
Opportunistisch gedrag werd niet gematigd door deze wetgeving.

Gedownload door Ilion Barboso (ilionbarboso@gmail.com)