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

Tracking Overhead Jack would have a many task at hand if he tried to daily trace all such items of overhead. For example: x     How difficult it would  become to track the "

Smith Corp. has determined that its contribution margin, (P - MC)/P, is 40%. A recent market research study found the following relationship between adverting outlays and sales rev

Master Designs Company has cash flows for operating activities of $350,000. Cash flows used for investments in property, plant, and equipment totaled $65,000, of which 70% of this

Suppose that $4 million is available for investment in three projects.  The probability distribution of the net present value earned from each project depends on how much is invest

Marginal Cost Marginal cost is the change in a firm's cost of production. It is related to a unit change in its output, or the added cost of producing the next unit. The margin

Find a journal article online about just-in-time inventory systems. In the subject line of your post, include the title of the article that you read. Post a link to that article wi

Two classes of stock authorized: $100 par preferred and $2 par common how do you record this transaction? May 18 Issues 30,000 additional shares of $2 common stock for $75 p

The Zooline Company (Pty) Ltd is an American based company that focuses on the LSM 8 -10 markets. They do vehicle interiors, raise or lower suspensions and install top end sound sy

Advantages of Standard Costing 1. Management via Exception: the standard costing is an example for management via exception. By studying the variances, management's attentio