Ppt of costing

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Ppt of costing

Follow This document is in continuation of my second document http: Explaining various settings in background as previous part. The cost component structure groups the costs for each material according to cost component such as material costs, internal activities, external activities, and overhead.

If the material is used in the production of another material, the cost component split which breaks down the costs according to material costs, internal activities, external activities, overhead, and so forth remains in the system when the costs are rolled up.

In the cost component split, you also define the following for material costing: Which part of the costs are fixed costs Which costs are costs of goods manufactured and what are sales and administration costs Which costs are relevant for stock valuation, commercial inventory valuation and tax inventory valuation When the cost component structure is assigned to the organizational units, you can specify that two cost component splits are created: Main cost component split This is the principal cost component split, meaning that it is used in the standard cost estimate, Ppt of costing can be used to update the material master.

The main cost component split can be a cost component split for cost of goods manufactured or a primary cost component split. Auxiliary cost component split this can exist in addition to the main cost component split, and is not used in the standard cost estimate. It can be used for analysis purposes, in that it can be displayed with the cost estimate and passed on to Profitability Analysis.

You can use two cost comp structure for reporting purpose and different reporting need. Material cost estimates are created in the Product Cost Planning component. The cost components separate the results of a cost estimate into raw materials, material overhead, external activities, setup costs, machine costs, labor costs, production costs, and other costs.

Display the cost components in the cost estimate T code ck view of Cost estimate Cost element and cost component like Mat, Labor, OH etc. Screenshot 2 The above screen shows the distribution of cost as per the Cost component structure T-code OKTZ In Cost Center Accounting, the cost component structure determines how the results of the activity price calculation are updated.

The cost component structure groups the costs for each activity type of the cost center according to cost components such as material costs and labor costs.

If an internal activity allocation is carried out, the cost component split which breaks down the costs according to material, labor costs, and so forth is retained at cost rollup. If the cost component split is not to be retained, you can create a switching structure for the cost component structure for Cost Center Accounting.

In the switching structure, you specify which sender cost component goes into which receiver cost component See below Screenshot 3 From screenshot 2 you will notice there is a Column called cost element.

We get those from settings in Cost component structure setting by assigning cost elements for respective cost component. Screenshot 4 Different Settings in Cost component Structure in see below. Control Cost Share- which includes Variable, Fixed and variable Cost Indicator for Roll up Cost Component This indicator determines whether the costing results of a cost component are rolled up into the next-highest costing level cost roll up.

You can specify which cost components are rolled up into the next-highest costing level according to the criteria specific to your organization. Example If the sales and administration costs and the cost of goods manufactured are to be costed simultaneously in a costing level, you can proceed as follows: You set this indicator for the cost components identified as the cost of goods manufactured.

These costs are rolled up into the next-highest costing level. You do not set this indicator for the cost components identified as sales and administration costs. These costs remain on the costing level on which they were originally calculated. Screenshot 5 Also the filter criteria for itemization are important for example anything which we wanted for statistically analysis purpose we can check not relevant for inventory valuation.

Some examples below shows based on the settings how the result will affect./11/19 6 Process-Costing System Process-costing is a system where the unit cost of a product or service is obtained by assigning total costs to many identical or similar units Each unit receives the same or similar amounts of direct materials costs, direct labor costs, and manufacturing overhead.

4) Total absorption costing: it is a traditional costing: method of costing where by total costs(fixed and variable) are charged to products. Indirect costs: these costs cannot be identified with the particular cost initiativeblog.comfication of cost A) Classification into Direct and Indirect Costs: direct costs: these are those costs which are incurred for and identified with a particular cost unit.

Many costs must be monitored and managed in order to run a successful foodservice operation.

Ppt of costing

Among the most significant costs of a foodservice operation are food and beverage costs. This indicator determines whether the costing results of a cost component are rolled up into the next-highest costing level (cost roll up).

You can specify which cost components are rolled up into the next-highest costing level according to the criteria specific to your organization. Top 8 Methods of Costing – Explained! Top 9 Methods of Costing – Explained! Top 2 Systems of Costing – Explained! Top 4 Techniques of Costing – Explained!

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