PA302 COST ACCOUNTING

COST ELEMENTS

Prepared by :Wan Maimunah Wan Ishak Politeknik Sultan Haji Ahmad Shah, Kuantan

Students will be able to classify the

elements of cost

Specific Objectives :

Cost Accumulation

Raw material

LabourDirect

Expenses

Overhead

MANUFACTURING ACTIVITIES

Production Cost

m)

1

RM

2 4

Production OH

DL

Cost for skilled or unskilled workers who involved directly in production

Eg : Carpenters/Machine operators in furniture industries

Cost that cannot be charged directly to the product

• Eg : Depre of machine

Cost that can be directly charged to product

Eg : Wood in furniture industries

3

DE

Any expenditure other than RM or DL that are directly incurred for the particular product

Eg : Hiring of special machine./tools

Examples :

Activities DM DL DEProductio

n OH

Clothing Company Clothes Tailor

Royalty on Patent

Factory Superviso

r

Bakery

? ? ? ?

Specific Objectives 2 :

Preparing Statement of Cost

Company XXXStatement of Cost

Direct material Opening stock of DM XXX + Purchase XXX

- Closing stock of DM XXXDM used XXX

Direct Labour XXXPRIMARY COST XXXProduction OH :

Indirect labour XXXDepre of machine XXX

XXX

XXX

+ Opening stock of WIP XXX- Closing stock of WIP XXX

Production Cost XXX

+ Administration OH:Clerk salary XXManager’s salary XX XX

+ Selling & Distribution OH :Sales expenses XXPromotion XX XX

XXX

+ Opening stock of FG XX_ Closing stock of FG (XX)TOTAL COST XXXX

Contoh

Reflection :

Do some reflection !

!

Question 1 :Cost information of a company :

Direct material 2,000,000Indirect material 50,000Advertising 95,000Direct Labour 650,000Indirect labour 170,000Production supervisor’s salary 45,000Depre for Factory building 65,000Depre for office building 35,000Factory machine’s depre 20,000Maintenance department’s cost100,000Administration cost 150,000Promotion 10,000Sales commission 5,000Office rent for salesman office 15,000

Exercise :

Calculate :

a. Total production OH costb. Total direct costc. Total production costd. Total indirect cost

a. Total production OH cost

Indirect material 50,000

Depre factory building 65,000

Depre factory machine 20,000

Indirect labour 170,000

Maintenance dept cost 100,000

Factory supervisor 45,000

Total production OH 450,000

Solution :

b. Total direct cost

Direct material 2,000,000

DL 650,000

Total 2,650,000

Solution :

c. Total production cost

DM 2,000,000

DL 650,000

OH 450,000

Total production cost 3,100,000

d. Total indirect cost

Production cost 450,000

Advertising 95,000

Depre office building 35,000

Admin cost 150,000

Promotion 10,000

Commission 5,000

Office rent for salesman 15,000

Total 760,000

Solution :

Question 2 :

Prepare Statement of Cost based on the following cost information :

RMSales 45,000Purchase of raw material 12,500DL 9,500Production OH 5,000Freight inwards of RM 200Factory supervising 700Opening stock :

RM 2,000WIP 550FG(1100 units) 1,650

Closing stock :RM 2,300WIP 1,000FG(3500 units) 5,250

Advertising & marketing cost is RM0.50/unit sold. There were 30,000 units produced.

TAWAKKAL

DOA

USAHA

NIAT

BERJAYA

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