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 firm operates two plants with the marginal cost curves given by MC 1 = 50 + 2Q 1 , MC 2 = 90 + Q 2 . If the firm's total output must be 80 units, how much will it produce a


A small company employing around 25 people manufactures and sells anthropometric measuring equipment - equipment used mainly in hospitals to measure the height and other dimensions

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

for financial accounting purposes, what is the total amount of product costs incurred to make 10,000 units?

Bubble Corporation manufactures two products, I and II, from a joint process. A single production costs $4,000 and results in 100 units of I and 400 units of II. To be ready for sa

ANGLE OF INCIDENCE:   It is an angle that is created when the entire sales line intercepts the entire cost line from below in the breakeven chart. It is inferred that higher the an

You are given the following information about a sole trader as at 1 January 2012: The value of assets and liabilities were: Non-current assets at net book value £16,800

The difference among expenses and expenditure. Expense is the outflow from a profit oriented organization whereas expenditure is the outflow from non-profit organization.

NSC Ltd. has a 31 May fiscal year-end. NSC disposed of its Information Systems Group (ISG) on 31 January 20X3. ISG had a net loss (after taxes) of $37,700,000 in 20X3, to the date