Project of the month
"Planned Cost Accounting: determination of calculation bases and costs"
Especially in economically tense times, it is important to know exact costs, in order to make the correct decisions.
KEY FIGURES
- Costing records have been determined
- Establishing an annual routine for updating the planned cost accounting
INITIAL SITUATION
An Interior Design company has not updated their cost center rates in years. Only annual percentage increases based on inflation rates were added to the existing rates.
Consequences:
- Costs for the products are no longer known with sufficient accuracy.
- Costing rates of the individual cost centers are too imprecise.
- Marginal costs and contribution margins cannot be determined due to the lack of a breakdown of fixed and variable costs
APPROACH
- Definition and restructuring of cost centers – What should be calculated? What costs should be determined by surcharges?
- Planning of sales targets for the plan year
- Determination of personnel costs, taking into account wage and salary increases
- Creation of a planned cost distribution sheet with comprehensible distribution keys, separated into fixed and variable costs
- Determination of cost rates per cost center
- Development of a planned cost tracking on a monthly basis.
RESULTS
- Full cost transparency, at all times
- Long-term basis for reliable calculation rates
- Simple procedure for annual updating