Cost Accounting

Definition of Cost Accounting

   

Definition of Cost Accounting is a process of recording, pengolongan, peringkasan well as the presentation on manufacturing costs (production) and sale of products or services by using a certain way and its interpretation. Cost Accounting can be used in meeting the needs of external parties (investors or creditors) and internal (management) company. Costs for internal company information is usually presented adapt to the needs of management, while presented to external parties shaped Income Statement and Balance Sheet of the Company. Specialized management company, the cost information is so important and so help them in making a decision in the company's operations.

Abdul Halim added that the definition of cost accounting, he said:

accounting cost accounting is talking about the determination of Cost (cost) of a product produced (or products sold in the market) either for order fulfillment and the buyer or to be used as merchandise inventory that will be sold.

Cost accounting purposes

Cost accounting purposes, among others:

• Planning and control costs. Management prepare estimates of revenue and costs in achieving the goals set by the company. the basis used to estimate these costs are historical data, but fakor another potentially have an impact on costs was also considered. then the management will examine whether the costs incurred in accordance with the planning cost estimates have been prepared. If there are irregularities, the management should analyze what is the cause and memeprtimbangakan steps necessary corrective action

• To Determine the cost of a product or services produced by the company with the precise and meticulous and summarizes all costs of production or delivery of services. Costs presented a historical cost companies. Cost Accounting generally in determining the cost of products is intended to meet the needs of top management and external parties. Therefore, the process of preparation of this cost accounting in determining the basic price is based on Financial Accounting Standards (GAAP) applicable

• Management Decision Making, this particular decision regarding the future. Then the accounting information that is relevant to making a particular decision pobud akann auditory information coming. cost accounting reports aimed at making a decision is part of "management accounting"

Cost Classification

The classification or the classification of costs is a systematic process of classifying the over all existing elements into certain groups to be more concise in order to present more information.

Cost is a sacrifice of economic resources that can be measured in units of money that has occurred or is likely to occur for a particular purpose. Principal elements of costs are:

• Cost is the sacrifice of an economic resource

• Measured in units of money

• It occurs or potentially occurs

• For a specific purpose

In cost accounting, costs are grouped into various ways, in general, the cost is determined based on the objectives to be achieved by grouping these. in cost accounting commonly known as the different costs for different purposes. there are 5 ways in the classification of costs:

1. Based on the object of expenditure.

Object names expenditure is a basic classification of costs. for example fuel, all expenses associated with the fuel is called the cost of fuel

2. Based on the basic functions within the company.

At the company's manufacturing, there are 4 main functions, including: the function of production, marketing functions, administrative functions, and financial functions

A. Production Function

The production function is a function that is always associated with the activity of processing raw material (feedstock) into a product ready for sale. based on the function of production, production costs can be grouped into several groups:

• The cost of raw materials, processed materials (processed) becomes part of the finished product, its usage can be identified or is part integrall on a particular product. The cost of raw materials is the price of the acquisition of unused bags of raw materials in processing product

• Direct Labor Costs, the reward (remuneration) which is given to the workforce (employees) plant which benefits felt directly on the product produced by the company.

• Factory Overhead, the cost of production other than labor costs directly (BTKL) and the cost of raw materials (BB). has elements that can be classified into:

1. The cost of auxiliary raw materials.

2. The indirect labor costs

3. The cost of depreciation and amortization of fixed assets plant

4. The cost of electricity, water plant

5. The cost of insurance factory

6. Other overhead costs - other

7. The cost of repairs and maintenance of fixed assets plant

B. The marketing function

The marketing function is a function associated with the sales activity of finished products ready for sale and can earn profits in accordance with the wishes. with the basic functions of marketing, costs can be classified into marketing costs. marketing costs are costs for running marketing activities, for example:

Advertising expenses Cost of sales haul

The cost of the salary costs of marketing campaign

C. Functions and general administration

This function is a function associated with the activity in the determination of a policy, direction, and supervision of the company's overall activity suapa can run effectively and efficiently. based on the general and administrative functions, the cost can be classified into general and administrative costs, which costs are sacrificed in coordinating the activity of production and marketing. for example, the cost of salaries division of finance, accounting, cost accountant examination, other personnel costs and other

D. Financial Functions

The finance function is related to financial activities, provision of funds needed by the company. These costs dinamanakan financial costs. for example, the cost of interest.

3. Based on the relationship with financed costs

Cost center can be linked to products manufactured (produced), contained in the plant department, the marketing area or parts within the company. grouping objects or a fee based on the cost center can be divided into;

• Direct Cost (Direct costs), the cost benefits can be identified in specific object

• Indirect Cost (langusng no fee), a fee that benefits can not be identified in a particular object, or in other words, the cost of which benefits enjoyed by some object or cost center

In relation to the product, the cost could be divided by 2, namely:

• To Direct Costs Product, the cost of raw material (feedstock) and labor costs langung is a direct cost to the product because it can be identified directly on the product

• Indirect Costs to Product, Factory overhead costs are indirect costs into the product because it can not be identified directly on the product

Viewed relation deng departments contained in the plant, the cost can be classified into direct costs of departments and also indirect costs of the department. departmentalisasi is the purpose of an order of accuracy of loading of goods as well as for control over costs. department in the plant can be classified into two groups:

• The production department, production department is the part that is carried out in the factory diaman processing of raw materials (raw material) into finished products.

• Department services, is the part that is in factories that produce services that will be utilized by other departments. either the production department or other services department.

4. Based on the behavior of the costs associated with changes in the volume of activity

Grouping costs in accordance with the changes in the major activities aimed at planning and cost control, and also making a decision. tendency to change a charge against activities can be classified into:

a. Fixed cost

• Costs numbers are still not influenced changes in the volume of activity up to a certain extent.

• The unit cost will undergo changes inversely with changes in the volume of activity.

b. Variable costs

• Cost of which the amount will change proportionally with changes in volume activity.

• The unit cost takterpengaruh by changes in the volume of activities / events.

c. Semi-variable costs

• Cost of which the amount is changed according to changes in the volume of activity / activities, but the change is not comparable.

• The unit cost changes inversely associated with changes in the volume of activity / activities but its not comparable.

5. Based on the period of benefits

Costs can be divided into two if it is based on the period of benefits:

• Capital Expenditures (capital expenditure), is spending a charge that has benefited more than one financial year (accounting period). When this happens expenditure, dikapitalsi into the price of the asset and the assignment to the accounting period the asset is utilized diaman. Please read a more complete discussion of these and the accounting treatment in: capital expenditures

• Revenue Expenditures (Expenditures Revenue), these expenditures provide benefits at the time of the accounting period in which the expenses occurred. Generally, these expenses are directly charged in the period.

For the divergence capital expenditures and revenue expenditures please see: differences in revenue expenditure and capital expenditures. Okay enough up here the basic fundamentals of Cost Accounting