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When estimating future costs to establish an overhead recovery rate, full allowance for the anticipated rate of inflation should be made for the review period. Similarly, when actually quoting estimates or fixing selling prices, the up-to-date cost of materials and depreciation should
be used. To do otherwise will not result in sufficient profit being made to replace the resources consumed at today’s prices. Continue reading “INFLATION”

This is not so much a costing technique as a management process to drive down costs to a level that will earn a satisfactory margin on the target selling price. This is the very reverse of cost-plus pricing which builds up direct and indirect costs to a total cost, then adds a profit margin to arrive at the selling price, as shown in Figure 12.1. Continue reading “TARGET COSTING”

This system of costing applies to any service industry where a uniform or standard service is provided to customers. In theory it should be easier to cost services than, say, manufactured products, because there are no stocks and work-in-progress to be valued. In practice it may be
hard to define some services and to draw boundaries to separate one service from another. Without such definition it will be impossible to cost separate services. Continue reading “Service costing”

This system of costing applies to a continuous and ongoing process that never, or rarely, stops. In such circumstances the unit cost cannot be separately recorded as in job costing. The unit cost in process costing is found by dividing the total costs for a period of time by the output over that period. Continue reading “Process costing”

Making debts is surely one nice option people can commonly take in order to finish their financial problems. Usually, people are getting frustrated over their current financial problems so that they would opt to make debts in order to relief the stress but as a matter of fact, being so dependent upon debts is surely one thing that dangerously threatens people’s life. Continue reading “Easier Way to Eliminate Debts”

Where a number (batch) of identical products (cost units) are produced at one time they are often treated as one job in total and costed as such. The unit cost is therefore the total cost divided by the number of cost units in the batch.

Example
A batch of 1,000 washing machines was produced by a factory last week. Direct costs of labour and material parts charged to the job number for this batch amounted to £80,000. Overheads attributable to this production were a further £70,000. Continue reading “Batch costing”

Working out the total cost of a product may not be quite as straightforward as it sounds in some industries where different methods of production or operations are used. There are a number of costing methods specifically designed to suit the way a particular product is made or service provided in varying industries and sectors. These costing methods go under various names:

• job costing;
• batch costing;
• contract costing;
• process costing;
• service costing.

Essentially, these five methods derive from only two main forms – job costing or process costing. We now look at the distinguishing features of each costing method.

Job costing

This applies where an individual job is carried out to a customer’s specification, either at the supplier’s premises or at the customer’s premises. Jobbing printing and repairs to domestic appliances are relevant examples. The earlier examples (building up costs to quote a price) illustrated job costing.

Each job is costed as a separate entity and given its own unique job number in the cost coding system. This number is inserted on all prime documents – timesheets, stores issue notes and invoices – so that all direct costs related to each particular job are specifically charged to it. Overheads are added later in line with the recovery methods and recovery rates used by that firm. In this way the total cost of each job is gradually built up until the job is physically completed. This information can all be recorded by computer, but in some firms a job card may accompany the work through its various stages and departments. Resources consumed are logged on to the job card as the work progresses, in the same way as it would be entered on a computer record of the same job number.

Taken From : Accounting for Non-Accountants

If you take quick survey to random people on the street about portion of income uses to pay monthly bill, most of people will answer more than a half of the income. It means there is almost no portion uses for saving and emergency expenses. We usually use credit card or loan as back up finance. This will not cause any trouble if we able to manage the loan wisely. Otherwise if you can not manage it or late to pay it back, it will be the beginning of your nightmare with debt. Or if you try to cover up all your debt with other loan without changing your life style, you will through this financial condition all over again. It is like dig another hole to cover up the previous hole you dug. There is no end unless you find a way to break all this cycle. Continue reading “LEARN MORE ABOUT DEBT HELP”

The conclusion we can draw from this is that there is no one profitmargin percentage that applies to all firms. Each firm sets its own target in the light of what is achievable in its own industry and circumstances.

The 10 per cent profit margin used in the estimating example may or may not be typical of the printing industry. We would have to look at the results of surveys carried out by their trade associations, or business monitoring organizations, to know what was the norm. Continue reading “PROFIT MARGINS (2)”

As we know that the economic is having downward condition and it can not be predicted when it will relief because every country is suffering from economic recession. Everybody is having problem with economic and financial condition like huge burden of bills and loan because many financial services and banks increase their interest to increase their fund. That is why it is important for every people to make financial adjustment in order to be able to survive. We can not longer consider debt as trivial. We must be able to do debt management and find a way to eliminate our debt. It is not easy especially if we do not have adequate knowledge about finance especially debt management. Continue reading “LEARN EVERYTHING ABOUT DEBT ELIMINATION”