Cost element, Cost Accounting

Cost Element

Stage 1. Cost Elements

The raw data concern with Labour, Expenses, and Materials are gathered from Invoices, Payroll, and Requisitions and Goods Issued Notes.

860_cost element.png

Stage 2. Coding

Each the raw cost data requires to be classified and after that coded in respect of the type of expense and location. This procedure is fundamental to all management and costing accounting procedures.

Stage 3. Cost Analysis

Whereas discrete items of cost can be selected to cost centers this is termed allocation.  Whereas the cost has to be shared or spread over some cost centers this is identified as apportionment.

Stage 4. Service Cost Centres

These are cost centers that provide a service to production cost centers.  Examples are Maintenance, Sores and Boiler House.  Their costs are built up through the common process of allocation and primary apportionment and then their net costs are apportioned or secondary apportionment over the production cost centers, hence forming part of production overheads that are absorbed into the cost units produced.  The difficulties of service cost centers are dealt along with in more detail underneath.

Stage 5. Production Cost Centres

These are the cost centers included directly in the production process.  Typical examples are the , Spray Shop, Assembly shop, Centre lathes, Drilling machines.

Stage 6  Overhead Absorption

The overheads of all production cost centre are absorbed into the costs of the units produced, generally in proportion to the time included that is by the Machine Hour or Labour Hour Rate.

Posted Date: 2/5/2013 6:54:27 AM | Location : United States







Related Discussions:- Cost element, Assignment Help, Ask Question on Cost element, Get Answer, Expert's Help, Cost element Discussions

Write discussion on Cost element
Your posts are moderated
Related Questions
A company constructs a building for its own use. Construction began on January 1 and ended on December 30. The expenditures for construction were as follows: January 1, $550,000; M

With the introduction of computer-generated animated films (CGI), there has been much discussion of the impact on the movie industry. For example, illustrators need to have differe

The sunshine tomato soup shippers produce tomato soup at three west coast canneries in Bakersfield, phoenix, and Eugene. The soup is shipped to four regional warehouses. Due to hig

Dixon Corporation was established on January 1, Year 1.  The firm has 2 divisions, Division A and Division B.  Division A manufactures standard carpets, and Division B manufactures

Absorption Costing, Marginal Cost and Marginal Costing Absorption costing is most often utilized for routine profit reporting and must be utilized for financial accounting rea

Encik Farid, a sole trader, started his business on 1 May 2010 under the name Farid Enterprise. The following are his business transactions for the month of May a. Encik Farid b

1) Define Elasticity.  If you have a product where elasticity is less than one, what does that mean?  Is it good, bad for the firm? 2) Why will firms not shut down as soon as th

i want to know the different types of costs.

Labour Costs Definition of Labour Cost A labour cost refers to all the costs incurred in compensating the human resources used in the production process to provide a us

Question: Suppose that the stock now sells at $80, and the price will go up by 5% or down by 5% at the end of first six month (t = ½).  Then, the price will either go up by 10%