OPERATING COSTING

BY JUHI Y. PUNMIYA
ROLL NO. 33

COSTING=Determination of cost
METHODS

OF

CONTRAC
T

BATCH

JOB
PROCESS

COSTING

SERVICE

SINGLE
MULTIPLE

What is Service Costing?

Cost

of providing the service.

Applied to systems performing services

Services are rendered to customers.
Examples:Educational
agencies,etc.

institutuions , hotels,transport

Nature of Operating costing

Main objective- compute the cost of the services offered by

the organization.
First Step- Find or decide the unit of cost in such cases.
The cost units vary from industry to industry.
For example, in goods transport industry, cost per ton
kilometer is to be ascertained while in case of passenger
transport, cost per passenger kilometer is to be computed.

The next step is to collect and identify various

costs under different headings. The headings used
are,
Classication of
expenses

Fixed

Variable

Semi -Variable

For example, in case of passenger transport

organization, most of the costs are xed while few
costs like diesel and oil are variable and dependent

Service Costs used in industries:

Transport
Electricity
Steamship Companies
Hospitals
Restaurants
Theatres
Travel Agencies
Schools
Road Maintanance
Hotels.

Service Industries

Simple Cost Unit

Passenger Transport

Per Kilometer

Goods Transport

Per Kilometer

Road Maintenance

Per K.M. of Road maintained

Water Supply

Per Kilo Liter of Water Supplied

Canteen

Per Meal / Dish

Service Industries

Composite Cost Unit

Passenger Transport

Per passenger - K.M.

Goods Transport

Per Ton - K.M.

Electricity

Per Kilowatt Hour

Steam, Gas

Per K.G. / Cubic Ft.

Hospital

Per Patient Day

Library

Per Member Book

Vehicle No:

XYZ Transport Company Ltd.

Cost Sheet October 2007
Registration No.
Days Operated:

Particulars
Particulars
A] Standing Charges/Fixed
C] Maintenance Charges
Repairs
Charges
Insurance
Tyres
License/Permit fees
Spares
Salaries of drivers,
Garage charges
cleaners etc.

Depreciation
Interest
B] Running Charges/Variable D] Total Cost
Expenses
E] Total ton
Petrol/Diesel
kilometers/passenger
Oil
kilometers
Grease

Thank You