Collection of Costing Data
After determining the unit of cost to which the total expenditure is to be allocated, the process of collecting the necessary data about costs of operating the service is carried out. The data after collection are classified under fixed and variable heads so that greater control can be exercised over costs. In whatever quantum the service is rendered, fixed costs shall not change and the management should concentrate over such costs. The expenses which vary according to a change in the operating level are grouped separately and sometimes such expenses are placed in sub-groups like maintenance charges and running expenses so as to have a better idea about the cost structure.
To find out the cost of carrying goods or passenger for a distance suitable costing records should be maintained. Firstly, a Log Book should be supplied to the vehicle driver who should maintain it regularly. A daily log report or sheet should be filled in by driver of the vehicle giving necessary details about the journeys or trips made. Secondly, a vehicle cost sheet and performance statement should be prepared by the costing department showing details about the total and the unit cost.
This sheet serves as the basis for cost accounting and control. Idleness of vehicles, under-utilization of capacity by low burdening or over-utilization by extra loading, duplication of trips etc. are avoided if a proper system of checks in enforced through daily log reports.
The data may be compiled from the daily reports and cost summary and performance statement prepared. For preparing a cost sheet, the costs may be sub-divided under following heads:
(i) Fixed or standing charges: Whether the vehicle is in operation or not such costs shall have to be incurred. Examples of such costs are insurance premium, road tax, license fees, rent of the garage etc. Interest on capital if charged should be included under this head.
(ii) Maintenance charges: They are in the nature of semi-variable expenses, e.g. repair and maintenance of vehicles, cost of tyres and tubes, cost of their retreading, overhauling of vehicles, painting etc.
(iii) Running charges: They are incurred when the vehicle is in operation and they vary with the variation in the level of operation and thus in fact they are variable costs. Examples of such costs are petrol, oil grease, part of wages of drivers and conductors etc.
Depreciation is a semi-variable item which depending upon the method of charging depreciation may be included under fixed or running charges.
In order to make a comparative assessment it may be beneficial to compare the figures of the current period with those of the previous period. This will help in judging the operating efficiency of the current period.
Services: - Collection of Costing Data Homework | Collection of Costing Data Homework Help | Collection of Costing Data Homework Help Services | Live Collection of Costing Data Homework Help | Collection of Costing Data Homework Tutors | Online Collection of Costing Data Homework Help | Collection of Costing Data Tutors | Online Collection of Costing Data Tutors | Collection of Costing Data Homework Services | Collection of Costing Data