3.1- Classification of Costs

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来自 University of London 的课程

International Business Capstone

44 个评分

University of London

International Business Capstone

44 个评分

课程 6（共 6 门，Specialization International Business Essentials）

The Capstone project is the culmination of the International Business Essentials specialisation, and brings together knowledge gained in the previous courses and applies this to a real-world scenario. Throughout the Capstone, you’ll be taught new skills, and will use the knowledge you have gained throughout the Specialisation to develop a business plan. This course forms part of a specialisation from the University of London designed to help you develop and build the essential business, academic, and cultural skills necessary to succeed in international business, or in further study. If completed successfully, your certificate from this specialisation can also be used as part of the application process for the University of London Global MBA programme, particularly for early career applicants. If you would like more information about the Global MBA, please visit https://mba.london.ac.uk/. This course is endorsed by CMI

从本节课中

Internal Information for Business Planning

This week will investigate the internal information needed for business planning, including costs, break-even analysis, and pricing.

3.1- Classification of Costs4:28

3.2- Cost-Volume-Profit0:44

3.3- Breakeven Analysis | The Equation Method2:37

3.4- Breakeven Analysis | The Contribution Margin Method3:22

3.5- Further Aspects of Pricing11:24

与讲师见面

Barry McCarthy
Senior Teaching Fellow
School of Management, UCL

[MUSIC]

Costs should be well known from the financial accounting material that we've

looked at, things like purchases and wages.

However, for a management accounting, we need a more detailed analysis.

That's often what's required.

For example, our purchases, we normally call those materials.

These are often analyzed into various different categories, wood, timber,

components, paint, etc.

Wages, we call labor.

And these can be analyzed into different departments or functions.

Assembly labor, paint shop labor, supervision cost, etc.

For this purpose, it's ideal to actually classify our costs.

And two of the most commonly used classifications are whether costs can be

identified with a particular cost unit or cost object?

In other words, whether they're direct, willingly related with that or

indirectly related?

Or whether these costs change with the level of activity or work done?

In other words, do they vary or are they fixed within a relevant range?

Let's have a look at direct costs and indirect costs.

Direct costs can be identified with a particular cost unit or cost object.

For example, the amount of wire that's in a box of paper clips.

These direct costs normally comprise of direct materials,

direct labor and direct expenses.

Those cost which cannot be identified with a particular cost unit or

object are known as indirect costs.

Another term for indirect costs are overhead, so

you may come across that term.

If we look at the variable and fixed costs.

The key concept to understand is that of the level of activity which relates

to the amount of work done in an enterprise on a particular job event.

If we look at manufacturing, for example.

This will be the volume of production,

the amount of units that are actually produced.

In a service industry, the measure might be a little bit more difficult.

In hospitals, for

example, the level of activity is often measured in patient days.

Fixed costs tend to be unaffected by any changes in the level of activity.

For example, the managing director's salary, normally constant,

this is regardless of the amount that is actually produced.

Fixed cost can be thought of as time cost because

they're dependent upon a particular time period rather than a level of activity.

Factory rent will be x amount of pounds per annum whether anything is produced or

not, as an example.

Most so-called fixed costs are in fact, what we call step fixed costs.

That's is costs which are fixed, but only within a specific level of activity or

within a relevant range.

An example would be the factory rent which is fixed of course,

but only up to the maximum output of that particular factory.

If you wanted to expand and add capacity, then you'd need to have additional

factory space that would cause the rental cost to increase or take a step up.

Variable costs change directly with the level of activity.

You think of that maybe as the number of units.

As activity increases, so do the variable costs in the same proportion.

Materials are the other type or variable costs.

Material making one thing may cost you 50 pence to make an item, and

to make two it's a pound.

To make three it's 1 pound 50, etc.

There are some costs, however, that include both a fixed and variable element.

And these costs are known as semi-variable, semi-fixed costs.

A good example for this would be your home telephone bill.

That normally has two elements.

There's a fixed charge, the landline if you wish, plus there's a variable

part that changes dependent on the number of calls that you make.

This analysis of costs into their fixed and variable elements is a difficult and

often subjective exercise, and labor's a great example of that.

Do we treat labor as being fixed or variable?

It depends.

[MUSIC]

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