What are the different types of cost funds?
Activities based on activities is an accounting system that allocates production costs on the basis of production activities. The cost funds represent indirect costs of any activity that affects the process based on activities. In this system, the most common are three different types of costs: overheads, indirect materials and indirect work. Although each item is necessary to produce goods or services, the costs of items are not directly tracked on an individual product. Therefore, the cost fund and the cost of the cost allocate these costs to all goods and services produced in a given period of time. For example, equipment or building depreciation, salaries for management, real estate tax, payments for products or buildings, and similar costs fall within this group. Accountants must place these overhead costs in a single pool and then apply them to ALL produced products. This is usually the most common cost of cost -based costs. The cost driver can be working hours, machine hours or other rePresentative activities for the application of overheads for products.
Indirect materials represent any items needed to produce goods that are not directly monitored to one item or dose of goods. For example, the solder is necessary to connect the connection on the electronic board. The production department can use a solder for multiple boards produced for a long time. The solder is therefore an indirect material. Any material that has similar use in the manufacturing process falls under indirect materials that costs the cost of later costs in the cost -based costs.
The final category for these cost funds is indirect work. This category usually contains information about hourly wages for all employees who do not have a direct impact on the company's production process. Common examples are employees of the maintenance of equipment or inspectors of quality control. These individuals can be a mint slight impact on the production process, but again is not monitored to one item or dose of goods. Information for this cost fund often corresponds to the internal production period for the company.
As soon as the cost funds are set, the accountant must determine the driver's cost that best allocates the goods. Each activity can have its own cost controller for standard activities based on activities. Accountants often select the cost driver, which is best assigned on the basis of a specific activity. Only overhead, indirect materials and indirect work for each activity follow the corresponding cost driver.