Paper 3A: Cost Accounting Chapter 6 CA. Dharmendra Gupta, FCA

Transcription

1 Paper 3A: Cost Accounting Chapter 6 CA. Dharmendra Gupta, FCA

2 Meaning & Features Of Operating Costing 1 Applicability of Operating Costing 2 Costs Classification 3 Cost Unit in Operating Costing 4 Absolute & Commercial Tonne Kilometers 5 Operating Cost Statement 6 Difference Between Operation & Operating Costing 7 Examples and Problem 8

3 Method of ascertaining the Costs of Providing / Rendering /Operating a service Also called Service Sector Costing Adopted By Service Providers

4 Transport Services Hospitals Electricity Supply Companies Telecommunication Service Providers Cinemas Schools Boiler House

5 Fixed or Standing Charges Variable Costs or Running Charges Semi Variable Costs or Maintenance Costs

6 Hospitals Patient-Days, Room-Days, Operations Goods Transport Tonnes, Kilometers, Tonne-kilometers Passenger Transport Passenger, Kilometers, Passenger- Kilometers Cinema House Number of Ticket or Shows

7 Absolute Tonne-Kilomete Sum of Multiplications of Tonnes and Kilometers Commercial Tonne-kilometers Product of Average Tonnes and Total Kilometers

8 Particulars A. Standing Charges Depreciation Road Tax Insurance Manager s Salary Office Expenses B. Maintenance Charges Garage Rent Repairs Operating Cost Statement Of a Bus For a Month C. Operating or Running Expenses Diesel and Oil Driver s Salary Conductor Salary Grand Total (A+B+C) Passenger- Kilometers Cost per Passenger -Kilometer Rs.

9 Operating Costing Costing of Providing/Maintaining /Rendering Services No tangible output Costs are classified on the basis of nature Cost per service unit is calculated Operation Costing Where output of one stage becomes input of other stage Tangible or measurable output Costs are classified on the basis of Functions Cost per unit of output is calculated

10 Calculate Total passenger-kilometers Number of Buses -6 Days in a month -25 Trips made by each Bus in a day- 8 Distance (one way) -20 Kms Capacity of a Bus-40 Passengers Capacity utilisation -80%

11 Calculation of Total passenger-kilometers No. of Passengers = 40 X 80%=32 Kms by a Bus in a Day= 20 kms X 2 ways X 8 trips = 320 Kms. Kms by a Bus in a Month = 25 days X 320 Kms. = 8000 Kms. Total Kms. By all 6 Buses= 6 Buses X 8000 Kms. = Kms. Total passenger- kms.= 32 passengersx Kms. = 15,36,000 Passenger- Kms.

12 Commercial tonne- kms. & Absolute tonne-kms A lorry starts with a load of 20 Tonnes of goods from Station A It unloads 8 tonnes at Station B and rest of goods at Station C It reaches back to station A after getting reloaded with 16 Tonnes of goods at Station C The distance between A to B, B to C and from C to A are 80 Kms., 120 kms. And 160 Kms. Respectively

13 Absolute Tonne-Kilometers A to B + B to C +C to A ( 20 T X 80 Kms) +( 12 T X 120 Kms ) + (16 T X 160 Kms ) = 5600 Tonne-Kilometers Commercial Tonne- Kilometers Average Load = ( 20 T + 12 T + 16 T )/3 =16 T Total Distance Covered = =360 Kms. Commercial Tonne- Kms = 16 T X 360 Kms =5760 Tonne- kms

14 Analysis of Maintenance cost of two years is given Year Total Distance Maintenance Rs. 1 1,60,000 4,60, ,50,000 4,50,000

15 Segregation of Semi-Variable Costs into Fixed and variable Costs Variable Cost per Km. = Change in Costs/ Change in Kilometers (460, ,000) / (160, ,000) Re. 1 per Km Total Fixed Costs = Total cost Total Variable Cost,at any of the levels At 1,50,000 Kms Level Total Variable Re. 1 = 150,000 X 1 = 150,000 Total Fixed Costs = 450, ,000 =Rs. 300,000

16 Total Coal to handled = 24,000 tonnes in a Month Capacity of a Truck = 10 tonnes Trips in a Day =5 Days in a Month = 24 Find number of Trucks required?

17 Capacity of a Truck = 10 tonnes No. of Trips = 5 Tonnes handled by a Truck in a Day = 10 X 5 = 50 Total Tonnes by a Truck in a Month =50 X 24 Days =1200 Tonnes No. of Trucks Required = Total Requirement/ Tonnes done by a Truck in a Month =24,000 / 1200 =20 Trucks

18 In this chapter we have discussed Meaning & Features Of Operating Costing 1 Applicability of Operating Costing 2 Costs Classification 3 Cost Unit in Operating Costing 4 Absolute & Commercial Tonne Kilometers 5 Operating Cost Statement 6 Difference Between Operation & Operating Costing 7 Examples and Problem 8

19 What do you mean by Operating costing? 1 What are features of Operating costing? 2 Differenciate Operating & Operation Costing? 3 What is Absolute and Commercial tonne kilometer? 4 What is The Cost unit in different service industry? 5 How can be classify cost in oparating costing? 6 What will be % profit in cost, if profit on sales is 25%? 7 Name some industries where it can be used? 8

20