Product costing

4,228 views
4,140 views

Published on

0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total views
4,228
On SlideShare
0
From Embeds
0
Number of Embeds
1,884
Actions
Shares
0
Downloads
111
Comments
0
Likes
0
Embeds 0
No embeds

No notes for slide

Product costing

  1. 1. Product Costing= determining the cost associated with a product -Reasons for product costing -Variable, fixed and mixed HL: 2007, 2003
  2. 2. Product Costing1. Product = anything that is manufactured for sale (e.g. iPhone)2. Product Costing = determining the cost associated with a product iPhone 5 Materials = Manufacturing Cost =
  3. 3. Product Costing iPhone 5 Materials = $199 = €155 Manufacturing Cost = $8 = €6 Total = $207 = €161
  4. 4. Product Costing3. Manufacturing Costs incurred: +Direct Labour +Direct Expenses = Prime Cost (= direct cost excl. fixed costs) + Variable Factory Overheads + Fixed Factory Overheads = Factory or Manufacturing or Production Cost
  5. 5. Product Costing4. Reasons for Product Costing: (i) Fixing Selling Price (note: Selling Price = Cost Price + Profit) (ii) Control = comparing budgeted costs with actual (iii) Stock Valuation = to complete trading and profit and lossaccounts
  6. 6. Product Costing5. Variable Vs Fixed Vs Mixed For Example: (i) Direct Materials (ii) Direct Wages (iii) Overheads (iv) Administration Expenses

×