D Com Concept = bracing Cust 0 the department or Work center

or
east can have dtferent meanings depeating on the contest gub-vntt in wich the (ost were mvorrred- Faultales
i which ths used.
om epi + waoN
Cost von)
— In Simpic terms, Cost 6 acre
B pire Cort HO [dept
|

= rust that can be prurd Ao @ partieutar plant

D clasification of Cust (in general) = physieidy yraced Ao tne parkuslar Seqment under
consideration
O ebst iy dime OF ot |
~ 4g determing Whether
‘ Manvfadyring wost is vased on dy Au aildonlty f
Cprvdection DE {he pry fs free ’
- ia wst wncuned 0 the erofn

— prime ust ( om+ OL) gpk NOT dic clly WOLCUbIC 19 part outar dept oF
= eonytation wast ( OL 9 wD
SUp-yntt
® Won Manufackvring Cast ~ whether @ Ust is diced: or not depends on
— est incurred) ishing Lhe Open tins oe the bus which york cenrer is yoder eng deratien

and cone
\ CALiAz its ine products | services
. B- as to Contvolability
2. bs tol Timing of Charges to Revenue} Wi an acing porlod deh" s
being eomtrailable oF Nob qepend pour ea&
On tin
the organizahon
b> Expense ( ost tnwered when asset used yp of sud Feterence. LeueOf Gatorhy 1
for the purpose OF qenciiliry evtmie)
B Controllable Cost
~ pst that The manaqir can signiAcanty or hea
. Product Cost n+ PL OF
wllocece Gre Wel oF mayirence OF Such cast
~ wt assigned to goods | services umt sold |
le
B UncontralioeCust
— Known ay io cee sivic “oot, Goince produc: is stoed
- eost thar micnager CFASNOT siqniteatty infucnce
OS inventory Until sold) \ Hy Incuntnce

"Period ost “In elahon to [DeisOn Waking]

mataed AydINst weuCNUe in fhe time period
- Cnt that 1S
the chowce, preclude
© Gonarhunihi tact - benefit: sdaificed When n
in which tt is inuutred sO ‘ taking an altemative course of actio
§ Pig GSE IS NOT INGLOED 4 HOT PARTJOF the amount by which the Cost differs.
onc
ras yur chase Sur Sy OF Gods te bo mansadycd Awd dHernative achda . “toxmental
‘ tas eqst cured i 4 ternative. bE ull nok be
cd_er? alteenahe,
i _Anofh
Iheurr
» Marginal [ys - extra cost ineueted When add’ bit is’
e <A = the result tf the total water |
“fhe pind no.of VAs manvfo”
Sunk ‘ Cost - eost that hos been pard or inevr ty, d
dy gh afeck Huhne eases 7
“by any currant OF Ao. <e
7
anes 2,

ek enst.— cust ANA qUIKES Pay.

5 dhechihnd as a vesult & Buy wire, :
 O Dihe Terms commonly vsed sf the cody of
‘Management Accounting
‘+ tak
dehawar— how a es ea * cost Allocation — the process HF Signin
¥/ Crespand to changes in Yhu level” ews gin
Q cost pool 4) the aipprop- ent Obytehives
company ociity .
— Tracing and assigning cose
= Crear of _vIgdnraahos output of 10 one or more eS! Obyechvs ctth
produds or services As departmynts
tystomers oY P10duds.
* Cost Orivers- - achity that (cause? tost Wu change, ; . or resourc
© Cost Ohjeshve - Ony Udivity hn
incu Cost
e far which a
of activity that Separate MeAsWreMent of ccost is desired-
# Variable Cast - cost that <huinge>, wntotal, > Cost Qbjed= ic any fem oF cictivtly whch wst
dicclly Propdrtendtl tothe Changes In Ow accumulated » measured
The level oF Adivity- Coost dene) NcosUrement — thefirst Hep iq Chmehng ar,
* Fixed Cost cast that Maing: vachang ed vndatal,
predichng cost as a Synchon € approp cust drives
asthe level OF activity Cust driice)
o Control~ 1S the i”igatt systemic Hart 49 adhe
vies within the relevant range,
Ooyrekives by comparing perfarmance
7 fo plan:
sf Variable ust — eyst Shat and;achng jy coriccderentes bw - them-
W composed of A Lived s Varidbie © (sh Estimate — is the process of determining|
behavior of nature
how @ paride cost benaves
Range- wthe assumed 1ange o& achviky
« Cost POO) a collection of costs +0 be assigned
whi ch rfleds the normal opcrating tevdle HO SH OF UOT Ohgechues
and the Yelahonship of cost behavior ‘y vald
, Capaaty cost ~ the fintd cost OF beteg able to
P Cost Func hon — formula 40 Which the TOTAL COST deliieee O esicel (evel of production of to
Provide a desired level of service while
of the firm will be tomputcd-
mantaining produc ov Sevice attri ~ quality
— algebraic equatwn ved hy manager
fo describe the icidhorship bw.
COST y the COST ORWER
— Y= Ad bx) or
# (pmmon Wsts — NOi-Htaceahie cose incurred 40
Total cost = Fatal Fe)+ the penehit of more than 4 funchonal classifi cat
CvCfonitX no. of yn)
Or business unit
sepavahngl Mixed Cost] RO Cust - also culled program
= wor \-
Dis Crenonan x i

P Weigh -Low Method DVariolé cust per Unit ts Obst" y aire expenditures whidh ae fixed asa
tompied as : SUH Of Management poluy
; ; woo
= HH@ highestlevel — cs} @lowest lewd! Marginal Costing ~ als culled variable, costing
or © lorcst
adivity@ highest — achvit y which assigns Only) enevaniabley manufuch
cost +o products -
= change in total_ewSt
change Ws activity Wend
 oper
yaent

@
~

Iu, 000 unity = Told Vargabte: cost 1c ,000

35,000 units = Téa Variauly tost AV 35,000 |

@ Unit Gst *
y DM P23p untt = om + OL 10H4y)
og) Dict CoJst
IR on OL P20 U tacable] y+ ro +
+g Supnor vi Cost { untk = Selling L Uden
: exp
Ost TUG Cadmm b) \ndi vec
exp)
4g + WO = (r OS |
Sales Setlfeia 0 Collng Cnon- hawableJ
salaries Ky)
cost [unt = selling Cpences (penod wst)
torre (4,000 c) Mond monviagiing support
. 149
-VoF.
d) TolatChtanufackhwviny crs font = pw + DL+ OW
30 + a9 + 460 ¥ ao|

9,900 monthly
@) Anaad tndired: Navar Py4g0 000 | (2 = TY
yr fs.
Pey maching ho
(m on ty ) 20 10 00 Ma dhies vs
Current period
Total cus = Toa FO + Toa VC
F-Yd,000 + (20,000 x £)
¥ iD, D0G,
# 9,000 + ¥99,000 = yee

©) pemngassBvernead (40d) P42, 000 12 T9000 montity

fer DL hour FIG
Curent period Cnoattiy) qu 0d Unik 7 adn units equines Sminutes OF DL

S. ay.000 % B mmnikes = 490,000 minales GO MMNUIES ©Gd hourD

= Toph FO + Toru VC
Total Cost
¥Gov0 + ¢ 8000 X Fo)
(00) + T12Z,800 =\F 13,800
 Achuih)

Mach u Hoes | _Unlty (os)

—
2500 36 180
yp 99009 lost 2,000 >

November: ( HADI hidesh — 2,000 )

cost Q hight st - lowest (2.,300
Manabi cost pur untt
- 7,00
Flas
d) Yonabie Cost Elemont achvity @ highet ~ lawtst y poo - 1900 vefunts
« il

beat! Tanvary §— EOD X 12-§ =| B/280

\) Vernaye cast © highest ¥ lowest actualy Mach = WOOK IDS =! 23,980
| Noventer Ho2D XIV =| 38,950 |
(adivty x V/unit)

C) Fed (s@ y
ouch level TAWAary E
BE000 SD
BhA950 Ss”| SYS EV oy We t luweet
Fee 74, = 95, BAT 2 ge twang Ae Same
March Ghd — VWqsW =\ 3 pv .
Cared voriable.) —

@ [ Momh foduchon Sppwhes Cost

Tan 4,400 (2,940 cfunte = 28s4O0~ to ,400
i
ao _ ~ ~~ ~—-..

Feb Gi 400 » 14,400) @Udd = 2,00

Maid 2,00 10, 80

a) Vonaie Ost Fey GOD EE 25K

Mach 2 Mao X44 = 10,558

\) Fred os ty 9¢,U00 — 26,10 — ne y

MGreh 10,¢00 - ab 'f

Q) @SOUW unit of Pro dudion ,

ebhinated supplies cost?

Talal sr + FU + VO
quo + (v0 xe)
© Veup + 22,000 2[Par,240