Cost Accounting groups, records and summarizes expenses of companies operating in production, trade and service fields by activity types. In other words, defining expenses and unit costs of related finished goods provides the basis for cost accounting. Cost accounting accounts are used to track expenses incurred during production periods and to distribute these expenses to finished goods.
Expenses indicate surcharges for company operations, while Cost means expenses incurred for finished good production. Expenses do not cause changes on companies' asset structures. However, costs increase active assets of companies. Expenses and costs are processed in profit and loss calculations during the fiscal year and in the long run respectively.
General Ledger allows expense types to be tracked, while Cost Accounting allows expense types to be tracked by cost centers. In this way, the amount of surcharges incurred within a given period can be displayed for each cost center. In other words, Cost Accounting provides bi-dimensional tracking opportunities while General Ledger allows a single dimension.
The aim of Cost Accounting is to apply debit balances incurred in production expense accounts such as material, labor and overheads to finished good costs by recording credits for corresponding accounts, and to correctly post these balances. When Cost Accounting is used, the involvement rates of production elements such as direct raw materials and overheads that affect costs on production are calculated, and costs are applied to products based on these rates.
Cost accounting definitions and transactions are recorded and tracked using the menu options located in the Cost Accounting section of the LOGO application.
The Cost Accounting section contains the following options:
- Main Records
- Operations
- Reports
The functions of these options are:
Main Records: The menu option consisting of the following options and used to record overhead and cost center definitions:
- Overheads
- Cost Centers
Operations: Batch transactions are located in this menu. The Operations menu contains the following options:
- Overhead Updates for Cost Centers
- Offset Overhead Incurred
- Undo Offsetting of Overhead Incurred
Reports: The menu option used to report cost accounting transactions. This menu contains the following options:
- Overhead List
- Cost Centers List
- Cost Centers Overhead Distribution Report
- Actual Overhead Allocations Report
- Cost Center Cost Analysis
- Summary Comparison Report of Overhead Incurred and Distribution
- Detailed Comparison Report of Overhead Incurred and Distribution
- Overhead Distribution Analysis Report for Work Orders