Cost Accounting
Raw (direct) materials cost :
Materials
·
that
go into the final product .
Materials that converted finished
are
during the manufacturing process into the
·
product.
·
variable cost
Direct labour cost :
the labour costs of those workers involved in the
This cost implies directly
·
manufacture of the
goods
·
The workers
Direct costs (prime cost) :
Costs that
·
are
directly involved in the production of finished goods .
direct material cost and direct labar cost
·
.
Indirect material cost/Factory Overhead :
·
These materials do not form part of the finished product but are still necessary
in the
production process . (e g Petrol materials etc. )
. ,
.
cleaning ,
Indirect labour cost :
workers directly involved production process Leg cleaning
the staff,
·
are not in .
maintenance staff, foreman
, factory manager , etc.)
Factory overheads :
factory overheads refer to all the costs that are incurred in order to run the
·
factory other than the direct materials and direct labour. Le g rent , insurance, .
.
depreciation , electricity , etc..)
Indirect materials and indirect labar are both classified as factory
·
overheads.
Variable costs :
These costs vary in direct
proporation to the amount of
goods produced.
·
e materials the more that is
produced the
greater the total cost
·
+ raw
g
-
.
.
,
.
-
electricity and direct labour
, Fixed costs :
·
These costs remain constant within a period of time. Irrespective of the amnt
of
goods produced
factory rent R10000, this would be the same no matter how
many goods
·
e =
.
g .
are produced
Total cost of production :
This equals to the material , direct labour and overhead costs .
factory
·
raw
Unit Cost :
·
cost of one item= total cost of production
no - of items produced
mark-up !
·
The profit the business adds to the cost
Selling Price :
Cost Price
price +
mark-up-selling
·
Fixed Costs= Factory Overhead Costs + Administration Costs
variable Costs = Direct Material Costs + Direct labour Costs +
Selling and distribution cost .
* Direct material and Direct labour cost is regarded as variable cost
contribution per unit price per unit-variable cost per unit
selling
=
Raw (direct) materials cost :
Materials
·
that
go into the final product .
Materials that converted finished
are
during the manufacturing process into the
·
product.
·
variable cost
Direct labour cost :
the labour costs of those workers involved in the
This cost implies directly
·
manufacture of the
goods
·
The workers
Direct costs (prime cost) :
Costs that
·
are
directly involved in the production of finished goods .
direct material cost and direct labar cost
·
.
Indirect material cost/Factory Overhead :
·
These materials do not form part of the finished product but are still necessary
in the
production process . (e g Petrol materials etc. )
. ,
.
cleaning ,
Indirect labour cost :
workers directly involved production process Leg cleaning
the staff,
·
are not in .
maintenance staff, foreman
, factory manager , etc.)
Factory overheads :
factory overheads refer to all the costs that are incurred in order to run the
·
factory other than the direct materials and direct labour. Le g rent , insurance, .
.
depreciation , electricity , etc..)
Indirect materials and indirect labar are both classified as factory
·
overheads.
Variable costs :
These costs vary in direct
proporation to the amount of
goods produced.
·
e materials the more that is
produced the
greater the total cost
·
+ raw
g
-
.
.
,
.
-
electricity and direct labour
, Fixed costs :
·
These costs remain constant within a period of time. Irrespective of the amnt
of
goods produced
factory rent R10000, this would be the same no matter how
many goods
·
e =
.
g .
are produced
Total cost of production :
This equals to the material , direct labour and overhead costs .
factory
·
raw
Unit Cost :
·
cost of one item= total cost of production
no - of items produced
mark-up !
·
The profit the business adds to the cost
Selling Price :
Cost Price
price +
mark-up-selling
·
Fixed Costs= Factory Overhead Costs + Administration Costs
variable Costs = Direct Material Costs + Direct labour Costs +
Selling and distribution cost .
* Direct material and Direct labour cost is regarded as variable cost
contribution per unit price per unit-variable cost per unit
selling
=
