COST ACCOUNTING

Baru Harahap SE, M.Ak

Purpose of Cost Accounting

 Understanding the Definition of Cost Accounting

 Understanding Cost Definitions
 Understanding Cost Classification
 Determine the Cost of Goods
Scope of Cost Accounting

Cost accounting consists of 2 words, namely accounting and costs

Accounting is technthe recording, classification and summarizing of financial data to
reporting and interpretation
costs are sacrifices made by reducing assets or increasing obligations in processing
production as measured by financial units
the definition of cost accounting is the process of recording, classifying, reporting and
interpreting the costs associated with the production of goods and services
 Cost Classification

Cost Type based on the current based on Behavior of cost

loading period

Direct Raw Material Costs Revenue Expenditures Variable Cost

(Direct Raw Material Cost) (Revenue Expenditure)

Direct labor costs Capital Expenditures Fixed cost

(Direct labor Cost) (capital expenditure) (fixed cost)

Factory Overhead Costs Breakeven Point

(Factory Overhead Cost) (Break Event Point)
Cost of Direct Raw Materials
Direct raw material costs,
namely the cost of direct raw
materials used in the
production process, direct
raw materials are activities
that dominate or share the
largest in finished products
and has a relatively large
value of indirect raw material
costs.
Example
in finished goods the leather shoes are used in pairs
because they are on the left and the right while the
direct raw material unit is leather.
The difference between units of finished goods and
units of direct raw materials, the direct raw materials
used or needed to produce one unit of finished goods
is not necessarily one unit, for example, to produce
one unit of finished goods, direct materials are needed
0.20 units or 3 units, so it depends on type of finished
goods.
Direct Work Quiet Costs
(Direct Labor Cost)
Direct labor costs are salaries or wages and
remuneration and with any name paid to employees
who participate directly in the production process,
while salaries or wages paid to factory foremen,
production supervisors and production managers
may not be included in labor costs directly but is
classified as indirect labor costs (Indirec Labor Cost)
Overhead fee Factory
(Factory Overhead Cost) Included in overhead costs:
Indirect Raw Material Costs
Factory Overhead Costs Indirect Labor Costs
are also called indirect ALT Factory Costs
production costs, that is, Factory Insurance Costs
the difference in costs United Nations factory costs
related to production in Factory equipment costs
addition to direct raw Depreciation Machine Costs
material costs and direct Depreciation Costs for Factory Buildings
labor costs Depreciation Costs for Factory Vehicles
Depreciation Equipment Factory Costs
Revenue Spending (Revenue
Expenditure)
costs that are charged in the period
in which the costs are incurred and
are immediately treated to reduce
revenue.
journal entries made at the time of
payment of operating costs are
Operating costs
XXX
 Cash
XXX
income usually expenses that are classified as income
expenses are expenses for operating / repair costs for
fixed assets for example are:
Routine
Its value is relatively small
Does not add to the economic life of fixed assets in
the Perform
For example on March 10, 2018 PT. Anggi paid a car
service fee in the form of replacing engine oil and
others of $ 280, i.e. this expenditure was considered
as income expenditure, so a journal was made as
follows:
Car Repair Costs $ 280
Cash $
280
Capital Expenditures (Capital
Expenditure) There are several conditions so that repair costs can
be treated as capital expenditures, namely:
In this Capital expenditure incurred for Repair costs are not routine
improvement of Fixed Assets is
capitalized by adding the Cost of Assets Value of Relative Large Repair Costs
that are repaired and will be depreciated
for the rest of its Economic Life.
Can Increase Economic Age

For example, on January 4, 2017 PT.Mita paid a car

journal entries made when paid repair fee of $ 30,000. The car was purchased on January
repairs are 5, 2011 with a base price of $ 128,000 and is estimated to
have an economic life of 10 years with a residual value
Fixed assets XXX of $ 8,000.
 Cash Requested
XXX Make a general journal entry to record the payment of a
$ 30,000 car repair fee with capital expenditure
Make adjusting entries as of December 31, 2017 to
record the depreciation of the car.

Cost Increases
(Variable Cost)
costs that increase
proportionately with changes in
Production / Sales Volume. If
the production volume increases
by 20%, the variable costs will
also increase in proportion to
the increase in production
volume by 20% and vice versa
if the production volume
decreases by 15% then the
variable costs will also decrease
by 15%.
Included in variable costs include:
1.Variable costs - production costs:
 Direct material costs
 Cost of calm work langusung
 Indirect raw material costs
 ALT Factory Costs
 Factory Equipment Costs
 Depreciation machine costs (using the yield unit
method)
 Depreciation vehicle costs (using the method of
depreciation of working hours)
2.Variable Costs - operational costs:
 Transport costs out of sales
 Equipment Costs
 Ikla fee
 ALT fee

Fixed cost
(fixed cost)
costs that do not
experience increment in
other words remain despite
changes in production /
sales volume, even if the
company does not operate
even these fixed costs will
still be available for the
company
1. Fixed costs - Production costs
 Indirect Labor Costs
 Factory Insurance Costs
 Factory rental fee
 Depreciation Machine Costs (using the straight-line
depreciation method)
 Depreciation Costs for Factory Buildings
 Depreciation Equipment Factory Costs
 Depreciation Costs for Factory Vehicles (using the
straight-line depreciation method)
 Land and building tax
 Fixed costs - Operating costs
 Operational employee salary costs
 Shop and office insurance costs
 Shop and Office Rental Costs
 Amortization Fee Patent
 Depreciation Costs for Store and Office Equipment
 Depreciation Costs for Shop and Office Vehicles
Breakeven Point
Break Event Point (BEP) a certain level of sales the company does not make a
profit and also does not suffer losses or in other words
the profit is zero
Called break-even analysis because income equals the
amount of costs

FC = Fixed Cost
VC = Variable Cost as Illustration of PT. Sewa get a budget in 2015 as
NS = Net Sales follows:
Sales of finished goods inventory
10,000 units @ $ 100
Variable Cost $ 600,000
Fixed cost $ 250,000
Calculate the PT.Newkan BEP?
PROFIT PLANNING

 The BEP formula can be used by management to plan future profits or plan losses.
 In the case of planning losses does not mean that the management deliberately planned the
loss of the success or failure of someone's management seen from the level of profit
obtained by the company.
 The higher the level of profit obtained by the company is considered the manager
successfully led the company.
 Plans a loss for example in a sluggish economic condition where the economic crisis and
predicted the company will suffer losses.
 In economic conditions thus the management will try to use the smallest possible loss of
the company.
FORMULY PLANNING PROFIT FROM
BEP
PROFIT PLANNING ILLUSTRATION

NewNewhan plans for the company NewNewhan plans that the company
to earn a net profit of $ 520,000, will suffer a $ 50,000 loss due to the
calculated the level of sales the economic crisis, calculate the sales the
company must achieve company must achieve.