cost estimating 10 11 Flashcards
cost
amount of money sacrficed for goods to bring a current or future cashflow into the orginisation
costs that expire are
expenses
direct costs
every cost can be luiked to a product or service
indirect cost
not easily tracked, also called overhead
more accurate costs means
more work, so is it worth it
example indirect materials for house building
hammers tools etc
receptionists-indirect labour. -management
overheads seperated into
manufacturing ovehead, administrative expenses, selling expenses
fixed, variable, mixed costs
fixed doesnt change when output increases, variable obvs changes with outp, mixed has variable and fixed components
how to find hourly cost
take last years over head, take last years acrtivities, find predtermined overhead by dividing .
three types of accounting
financial, management, cost
financial accounting
produce financial staements that convey info to outsiders
managment accounting
-info for operation
cost accounting
-expenses are allocated to products.
not all expenditures are expenses
- corrections are made like pre paid expenses( expenditure for another year)
- long lived assers are not in full as expenses for the period . depreciation.
costing methods
process costing-assigns average costs to each unit of production.
job order costing-differentiates the direct costs per job to see how profitable ach one is
activity based costing-percentage of overhead assigned to a job
