BUSS1030 Lecture Notes - Lecture 11: Cost Accounting, Indian Railways, Total Absorption Costing
27 Jul 2018
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Cost accounting involves measuring recording and reporting any cost object (e. g. product, service, department, customer, employee, etc) Deriving full costs in a single or multi-product or service operation: This will give you cost per litre or per unit: once you know what it costs per litre, you know how much to charge for the product. E. g. if the cost per litre, and you want a. Indirect costs (or overheads) all costs except direct costs; that is, those which cannot be directly measured in respect of each particular unit of output. The predetermined overhead application rate is based on relationship between estimated annual costs and expected annual operating activity. It is an estimate of the overhead costs and is used to find total cost. Features: established at beginning of year, single figure used to apply overhead costs to jobs, enables estimated costs of overheads to be determined at any given time.
