6491190
Description
Mind Map by Katie Start, updated more than 1 year ago
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Created by Katie Start
over 8 years ago
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Chapter 2 & 3
- Cost centres
- Cost centres are sections of
an organisation to which costs
can be charged.
- Cost centres
can be used to:
- Plan for the future
- Make decisions
- Control costs
- Plan for the future
- Profit centres:
- Profit centres are sections of a business to
which costs can be charged, income can be
identified and profit can be calculated.
- Profit centres are sections of a business to
which costs can be charged, income can be
identified and profit can be calculated.
- Investment centres:
- A section of an organisation to which
costs can be charged, income can be
identified and investment can be
measured.
- A section of an organisation to which
costs can be charged, income can be
identified and investment can be
measured.
- Cost centres are sections of
an organisation to which costs
can be charged.
- Coding systems
- Numeric coding
- Alphabetic coding
- Alpha-numeric coding
- Numeric coding
- Absorption of overheads
- Units of output method:
- Budgeted overheads /
Budgeted units of output
- Budgeted overheads /
Budgeted units of output
- Direct labour hours method:
- Budgeted overheads /
Budgeted direct labour hours
- Budgeted overheads /
Budgeted direct labour hours
- Machine hours method
- Budgeted overheads /
Budgeted machine hours
- Budgeted overheads /
Budgeted machine hours
- Units of output method:
- Cost behaviour
- The way in which costs alter with
changes in the level of output or activity.
- Fixed
- Fixed costs do not alter when the
level of output activity changes.
- Fixed costs do not alter when the
level of output activity changes.
- Variable costs
- Variable costs change in
proportion to the level of output
or activity.
- Variable costs change in
proportion to the level of output
or activity.
- Semi-variable costs
- Semi-variable costs contain both a fixed
element and a variable element.
- Semi-variable costs contain both a fixed
element and a variable element.
- Calculations:
- Total costs
- Variable costs per unit X Output + fixed costs
- Variable costs per unit X Output + fixed costs
- Unit costs
- Fixed costs /
output + variable
costs per unit
- Fixed costs /
output + variable
costs per unit
- Total costs
- The way in which costs alter with
changes in the level of output or activity.
- High/low method:
- A technique for calculating the variable and
fixed costs that comprise a semi-variable
cost by analysing the total costs at two
activity levels.
- A technique for calculating the variable and
fixed costs that comprise a semi-variable
cost by analysing the total costs at two
activity levels.
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