Kodo Millet PPT made by Ghanshyam bairwa college of Agriculture kumher bhara...
Cost centre and cost unit
1.
2. A defined area, machine or person to whom
direct and indirect cost are allocated. Also
known as Cost pool and Expense Centre.
It is a department within a company that does
not produce direct profit and adds to the
cost of running a company.
The manager and employers of a cost centre
are responsible for its costs but not
responsible for revenues or investment
decisions.
3. Process Cost Centre
Product Cost Centre
Service Cost Centre
Impersonal and Personal Cost Centre
Operation Cost Centre
4. While preparing cost accounts, it becomes
necessary to select a unit with which
expenditure may be identified.
The quantity upon which cost can be
conveniently allocated is known as a unit of
cost or cost unit.
E.g. per person, per piece , per kg etc.
5. The elements can be classified in following
three parts:
Material
Labour
Overheads
6. The substance or substances out of which a
thing is made.
It is principle substance or equipment that is
used in production for making the products.
It is the basic raw material for finished
goods. E.g. Cotton.
It is of 2 types:
Direct material
Indirect material
7. It is physical and mental effort used in
production. It is active factor. It is of two
types:
Direct Labour
Indirect Labour
8. Overheads means the expenses. It includes the
direct expenses and indirect expenses as
well. Its types are:
Factory Overheads
Administrative Overheads
Selling and Distributive Overheads
9. The Total Cost is the sum of following
components:
Prime cost
Factory cost
Office cost
Total cost
10. Behavioural Classification
Functional Classification
Controllable cost and Uncontrollable cost
Direct cost and Indirect cost
Product cost and Period cost
Relevant cost and Irrelevant cost