Cost Accounting
Fixed cost - costs that are independent of the number of products produced. Costs that stay the same regardless of the number of products produced. Eg. rent expense, salaries
Variable cost - costs that change as the number of products produced changes. Eg. in a carpentry factory, the cost of screws will be a variable cost as it depends on the number of products produced which need screws.
Direct material - (raw materials) → materials directly involved in the production process
Indirect material - materials not directly involved in the production process but necessary for the business to function. Eg cleaning materials
Direct labour → work force directly involved in the production of the finished goods, eg factory worker
Indirect labour → labour not directly involved in the production of the final product, e.g. Factory manager, cleaning staff.
Factory overheads - total cost of production excluding direct labour and direct material. E.g rent expense, salaries
Work-in-progress → products that are incomplete and still have to go through processes in the factory before being ready to be sold
Total cost= prime costs+factory overheads
Prime cost → direct labour + direct materials
Break-even → number of products that need to be sold to cover the cost of production without making a profit or loss. Measured in units ( i.e. tables)
References
Anon., 2007. The Answer series: Grade 11 Accounting. 2007 ed. Cape Town: The Answer.
Anon., 2019. Investopedia. [Online]. Available at: https://www.investopedia.com/ [Accessed 3 October 2019].
Doctor, K., 2015. FLIPHTML5. [Online]. Available at: http://fliphtml5.com/fkul/mgtf/basic [Accessed 1 October 2019].
T Hall, D. W. P. S. A. A. P. G. P. F., 2017. Accounting Study Guide. 2016 ed. Musgrave: New Generation Publishers .
Neha Pillay (2019)
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Grade 10
- Oct 3, 2020 Budgeting
- Oct 3, 2020 Cost Accounting
- Oct 3, 2020 Value Added Tax (VAT)
- Oct 3, 2020 Financial Statements Analysis
- Oct 3, 2020 Year End Adjustments
- Oct 3, 2020 Closing Transfers
- Oct 3, 2020 Salaries and Wages
- Oct 3, 2020 Financial Statements
- Oct 2, 2020 General Ledger
- Oct 2, 2020 General Journal
- Oct 2, 2020 Creditor's Allowances Journal
- Oct 2, 2020 Creditor's Journal
- Oct 2, 2020 Debtor's Allowances Journal
- Oct 2, 2020 Debtor's Journal
- Oct 2, 2020 Petty Cash Journal
- Oct 2, 2020 Cash Payments Journal
- Oct 2, 2020 Creditor's Ledger
- Oct 2, 2020 Debtor's Ledger
- Oct 2, 2020 Trial Balance
- Oct 2, 2020 Cash Receipts Journal
- Oct 2, 2020 Financial vs Managerial Accounting
- Oct 2, 2020 Accounting Equation
- Oct 2, 2020 Assets, Liabilities and Owner's Equity
- Oct 2, 2020 Accounting Cycle
- Oct 2, 2020 Accounting concepts of a sole trader
- Oct 2, 2020 Internal Control
- Oct 2, 2020 Accounting Principals
- Oct 2, 2020 Indigenous/Informal Accounting systems