Welcome to Scribd, the world's digital library. Read, publish, and share books and documents. See more
Download
Standard view
Full view
of .
Look up keyword
Like this
1Activity
0 of .
Results for:
No results containing your search query
P. 1
Costing and budgeting by yousuf

Costing and budgeting by yousuf

Ratings: (0)|Views: 36|Likes:
Published by Yousuf Hasan

More info:

Categories:Types, Business/Law
Published by: Yousuf Hasan on May 26, 2011
Copyright:Attribution Non-commercial

Availability:

Read on Scribd mobile: iPhone, iPad and Android.
download as DOCX, PDF, TXT or read online from Scribd
See more
See less

05/26/2011

pdf

text

original

 
  Assignment on costing and budgeting
Page
1
of 
23
 YousufHasan Id no:6650
Introduction:
F
ord motor company one of the top manufacturing company in UK.It was establishedin 1993 and employed 5929 people.
F
ord is now most popular car maker in UK. Over 100 years they are leading UK market by creating innovative products and moreefficient and attainable for people.
Answer outcome (1.1)
Cost represented the estimated dollar value of resources consumed by theorganization in providing a product or service; they are critical element of manybusiness decisions. Detailed cost information provides a company with useful dataon its resource spending and how each product and service contributes toprofitability. According to William Baumol, 1968 ³costs are the monetary value of expenditures for supplies, services, labour, products, equipment and other items purchased for useby a business or other accounting entity´In other way cost is anything incurred during the production of the good or service toget the output into the hands of the customer.The customer could be the public (thefinal consumer) or another business.Controlling costs is essential to businesssuccess.
Classification of cost:Figure 1.1: Classification of cost
c
ost
ElementsNatureFun
c
tionRelevan
c
eControllability
 
  Assignment on costing and budgeting
Page
2
of 
23
 YousufHasan Id no:6650
E
lements of cost
:
Row materials are converted into product by the help of manufacturing concern, such as labour, plants. The elements which are contributethe cost of manufacturing known as elements of cost. The elements of cost arefollows
:
 Particular process, job operation or product has a relationship with direct material,direct labour and direct expense but there is no relationship with indirect material,indirect labour and indirect expenses.
F
actory cost= Prime cost + factory overheadCost of production= factory cost + administration overheadTotal cost of sales = cost of production + selling and distribution overhead
M
aterialLabourExpenses
 
  Assignment on costing and budgeting
Page
3
of 
23
 YousufHasan Id no:6650
N
ature of cost:Function of cost:
Fixed cost
‡Costs remain fixed over arange of output levels,
e.g. rent and rates
Semi fixed
‡Costs which combine afixed and variable
element, e.g. telephone bill with fixed monthly or quarterly rental andcharge per unit
Variable
‡Costs vary directly withoutput, e.g. direct
materials and directlabour 
‡Every year ford motor company spend hugeamount of money in production to createinnovative andattainable products for  people.
Production
‡After produce the productford company needs tomake sure product reach tocustomer and that¶s cost
money.
Selling and
distribution
‡To make the operationsuccessful Ford motor company has to spendmoney for administration
Administration
F
inanc
  
d
  
partm
  
nt
¡  
¡  
rd m
¡  
t
¡  
r c
¡  
mpanyn
  
d
¢  
t
¡  
d
  
cid
  
h
¡  
wmuch m
¡  
 
n
  
y th
  
y will
¢  
p
  
nd pr
¡  
ducti
¡  
n,
¢    
lling and di
¢  
tributi
¡  
n,R&D
  
tc.
 
Finance
‡Ford
£   
o
¤ 
or co
£   
 pany needs
¥ 
o do R&D
¥ 
o crea
¥ 
e
¦   
ore
§ 
nnova
¥ § 
ve produc
¥ 
and
¥ 
oadop
¥ 
new
¥ 
echno
¨ 
ogy.
esearch anddevelopment

You're Reading a Free Preview

Download
scribd
/*********** DO NOT ALTER ANYTHING BELOW THIS LINE ! ************/ var s_code=s.t();if(s_code)document.write(s_code)//-->