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Q1 (Session 2.2 (Different cost classifications (Behaviour (Fixed,…
Q1
Session 2.2
Different cost classifications
Nature
Material
.
Labour
.
Expenses
Subjective
Purpose
Direct
.
Indirect
Objective
Relevant / nonrelevant
Decision making
Function
Production
Administration
Selling
Behaviour
Fixed
Variable
Semi-variable
Stepped fixed
Normal / abnormal
Events influenced
Controllable / non-controllable
Manager influences cost
Cost centre
Costs gathered attributed to units of output
Contrast - Cost object
Session 2.3
Why need costing system
Accurate measurement of cost
Assessing past performance
Planning future operations
Monitoring performance against budget
Decision making
Cost reduction & control
Same trade or sector similar cost structure
Collect & report cost information
Comply
External reporting requirements
Gross profit Calculation
Sales - Cost of sales = Gross Profit
Indirect expenses subtract too
Useful
Need context
Financial performance
Decision making
Pricing
Session 2.4
Nature of production costs
Indirect costs
.
Direct costs
Can both be fixed or vairable
Cost cards
Records all elements of cost in a unit produced
3 Categories
Materials
Inventory control
Allocation
Buying
Receipt
Storage
Overheads or expenses
Labour
Performance related
Time related