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COSTING - Coggle Diagram
COSTING
CULF
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Production outputs. i.e XXX units of prouduct Y and XX units of product Z (Depends on the ranking as per CULF)
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Calculating Cost
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Absorption rate = Budgeted Fixed cost/ Budgeted base Budgeted base is also normal capacity as per IAS 2
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e.g. Millilitre to Litre , Hours vs Minutes, Monthly or Yearly etc.
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Problems in Costing
It is NB to note that when determing where the problem lies, YOU TEST ALL POSSIBILITIES
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e.g Labour, machine hours, imports
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" Bottleneck" - Is where in the production process, things are being slowed down. Holds back the production process
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