Costing

Questão	Responda
Cost defininition	The amount of money sacrificed for goods and services to bring a current or future cash flow to the organization
Expenses	Costs that are expired
Direct costs	Easily tracked to product or service. e.g. materials, labour like builders
Indirect costs	Not easily tracked to product or service. e.g. ladders, receptionists
Overhead	Indirect costs
3 Types of overhead	-Manufacturing overhead - Administrative expenses - Selling expenses
Fixed costs, variable costs and mixed costs	- Fixed costs do not increase or decrease when output varies - Variable costs increase or decrease in relation to output - Mixed costs have a fixed and variable component
Actual costing	Records product costs on actual cost of materials, actual cost of labour and actual overhead cost incurred - experienced during the reporting period
Normal costing	Uses a predetermined annual overhead rate, based on expected overhead costs and production volumes for a whole year
Differences in usability of actual costing and normal costing	Actual costing - the easiest, however may take longer. Normal - More stability if variation in production volumes, less variation in reported costs. Good if having to report back to shareholders etc
Main costing methods	Process costing - Average cost per each unit of production - done by department Job order costing - Differentiates cost per job (or hour) - done by job Activity based costing - Calculates what percentage of overhead should be assigned to a job - works in complicated environments
Cost indices	Normalized average of price relatives for a given class of goods, in a given region during a given time Different ones e.g. NZTA, reserve bank..different types power, water supply ..
Factors increasing acuracy	Quantity and cost of: - Construction materials - Labour - Equipment
Things affecting material costing accuracy	- Quantity: As per drawing, modifications -Waste -Pricing
Pricing definition and what should be included	Assigns a dollar value to a work item based on given specifications and predetermined quantities required Include: - Permanent and temporary materials - Labour Required -Eqipment required - Consumables ie fuel, tools
Percentage of labour costs out of total construction costs	30 - 50 %
Positive effects of union membership	For worker: -Right to strike, wages, job conditions - Benefits and job security - The power to act collectively For employer: - Available pool of skilled labour - Fixed wages and uniform conditions prescribed
Negative effects of union membership	For worker: Payment for initiation fees, dues etc For Employer: - Restrictive work rules - Inhibits innovation- Workers have no loyalty to contractors
External productivity factors	- Market conditions - Environmental conditions
Productivity internal factors	- Work conditions - Management conditions
Effect of making workers work a lot	Increases hours per day and days per week will cause production efficency to drop. 40 hours or less is ideal
Effect of large businesses on office expenses	The larger the business, generally the smaller the % of office expenses will be
Contingencies	Amount of money added to estimate to cover unforeseen needs of a project, difficulties, or estimation innacurracies
Three main components of the estimated bid price	-Direct cost -Jobsite overhead -Markup
Requirements for profit	- Need to have sufficient profit for a return on equity - Corresponds to industry average - May need competitive bidding strategies - As high as possible that the competitive market will bear
A cost model accuracy	Cannot be expected to give an accuracy greater than 5% - even less for engineering costs

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	Criado por Samuel Metcalfe mais de 9 anos atrás