What are some examples of direct costs

Overhead allocation

The primary overhead costs should be distributed to the cost centers (cost center accounting) according to the causation principle (cost accounting principles). This is not the direct causal relationship between cost types and cost units, but the indirect one between cost types and cost centers. In cost accounting, one always tries to allocate as many costs as possible to the cost bearers according to the cause, but if this is not directly possible - as is the case with overhead costs - then one chooses the route of causation-based distribution to the cost centers, because one hopes to reduce the costs from there by selecting suitable reference values ​​(key parameters, cost key, dimensions of the cost causation) to be charged most precisely to the cost bearers. The primary overhead costs are now distributed to the cost centers in two ways: (1) In the case of direct distribution, the account assignment (cost center number!) On the cost element documents shows exactly which body caused the costs. In this case, one speaks of individual cost center costs. Examples are third-party repairs or auxiliary production wages. (2) In the case of indirect distribution, it is not easy to see from the cost type documents which cost center caused the costs and to what extent. You have to make a distribution with the help of allocation keys and then speak of cost area overheads. Examples are rents or secondary voluntary social costs. Günter Wöhe (Introductory Guide to General Business Administration) is quoted on the general aspects that must be taken into account when selecting the allocation key that is based on the cause: "The accuracy of cost accounting depends essentially on the fact that the correct cost key is used as the units of measurement for indirect cost allocation Finding costs. "Correct" means that a cost key enables a distribution according to the principle of cost causation. This assumes that the key is proportional to all factors that influence cost accounting, in other words, the changes in the key parameters (reference values) must be proportional to the changes in the costs to be distributed. Just as with direct measurement, e.g. measuring the electricity consumption of a machine by means of an electricity meter, it is assumed that the numerical values ​​given by the meter are proportional to the electricity consumption In order to measure costs with the help of keys, a proportionality between key parameters and cost consumption can be assumed. The direct measurement of the key parameters then results in an indirect measurement of the costs. "Since in cost accounting the problem of the cost key (reference values, measures of cost causation) does not only arise in the distribution of the primary overhead costs to the cost centers, but also in the internal cost allocation as well the determination of costing rates, some examples of reference values ​​(cost key) are given below: Value keys can include: Cost values, such as wages, salaries, individual material costs, manufacturing costs or prime costs; inventory values, such as the value of current assets, the ( various) inventories, plants, etc .; sales figures or success values. Quantity keys can include: production, set-up or machine hours, number of work tasks; quantities used, transported, produced or sold according to number, weight, area or volume; number of shifts or calendar time en. Both the value and the quantity key must be supplemented in individual cases by qualitative factors (properties of production factors or products), e.g. fragile material, qualified workers, toxic, fragile or explosive goods, heated rooms, etc. Assessment, calculation) rates, quantity key for surcharge rates per reference size unit (key unit). The table gives some examples of direct and indirect distribution bases for individual primary and also secondary cost types. Literature: Haberstock, L., Kostenrechnung I, introduction, 9th edition, Hamburg 1993. Haberstock, L., Kostenrechnung II, (marginal) plan costing, 7th edition, Hamburg 1986. Haberstock, L., Grundzüge der Kosten - and income statement, 4th edition, Munich 1993.

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