Meaning of Cost Unit Accounting 2

Cost Unit Accounting 2

Cost unit time accounting

While you can determine the costs per service unit with cost unit accounting , with cost unit time accounting you determine the costs incurred during a certain accounting period , broken down into cost unit groups or cost types.

The cost unit time accounting ensures continuous control of the company process and provides information for short-term dispositions. If cost unit time accounting is divided into individual cost unit groups in the company, then the same procedures can be used as in cost unit unit accounting. If the revenue side is included, a very important step from pure cost accounting to cost and performance accounting is realized.

Differentiation between different sub-areas of cost unit accounting

There are other areas within cost unit accounting that are separated from one another. Each of these areas has its own task.

contribution margin

The contribution margin is the difference between revenues and variable costs. The contribution therefore indicates how much a product contributes to covering fixed costs. It can be related to an individual product or to the entire sales volume.

Full cost accounting

The full cost accounting refers to all schemes for the costing, where all the costs charged to the respective payers are. It should determine the actual or planned costs incurred by a cost bearer.

Planned cost accounting

The planned cost accounting determines the future costs for the company , the company divisions, processes and products. In addition, they allow a target / actual comparison for cost centers and costs for services provided. So you control the results, overhead areas and projects.

Total cost method

The total cost method represents a production income statement. The quantities produced are therefore used to delimit income and expenses. The income and expenses are then shown in relation to the units of measure produced in the period that has just ended.

If there are increases in the inventory of finished and unfinished products or self-constructed property, plant and equipment, then you record them as income. In the event of inventory reductions, these reductions are deducted from sales. Operating-related expenses are subdivided according to various types of expense.

Expense of sales method

This procedure is a sales income statement . To delimit the income and expenses, use the units of measure sold. You only show income and expenses when the products are sold and not when they are produced.

If the inventory of finished and unfinished products, as well as self-constructed property, plant and equipment is increased, these are not recorded as income and the expenses incurred are not recorded as expenses. If these items are reduced, they are shown as expenses for sold products. The expenses are not subdivided according to the expense type, but according to functional areas. The procedure is therefore very much based on the cost center structure. In the end, a cost and performance calculation is required.

Selection of the appropriate calculation method

Normally, a distinction is made within the calculation process according to the division calculation (single-stage and multi-stage), the equivalence number calculation and the surcharge calculation .

Which process you should use in a specific case always depends on the production program . In a one-product company that has only one production level, the single-level division calculation is used. In contrast, the multi-level division calculation is used in a multi-level company. The equivalence number calculation is used for individual production and the surcharge calculation for series production.

Cost unit accounting example

So that you can get an overview of what such an invoice looks like, here is an example of a simple division calculation :

Total costs 1,000 €
Quantity produced 100
Costs 1,000 € / 100 pieces = 10 € per piece

A simple division calculation is linked to three conditions, on the one hand homogeneity , sales and quantity continuity .

Homogeneity exists when only one product is permanently manufactured within a company.

The sales condition stipulates that the quantity produced corresponds to the quantity sold. No stocks may be built up.

The quantity continuity condition assumes that no stocks are built up in the area of ​​unfinished products and the required raw materials. So everything flows directly into production and consequently into sales.

If the specified sales condition is not met, administration, sales and manufacturing costs must be considered separately from one another. So it is calculated in two stages:

Production costs 820 €
Produced quantity 100 pieces
Sold quantity 90 pieces
Administration and sales costs 180 €

Costs 820 € / 100 pieces + 180 € / 90 pieces = 10.20 € / piece


Cost object accounting can be useful to determine the costs of various cost objects. It is always advisable to be aware of which calculation you want to carry out and consequently also have to. Note, for example, that the one-step division calculation can only be used if the company only manufactures one product on a permanent basis. But also calculations such as the preliminary calculation, the intermediate calculation and the final calculation play an immense role in the cost unit calculations and should definitely be carried out. In this way you can optimize and possibly also reduce costs by determining how much money flows into which cost unit.

Cost Unit Accounting 2