In corporate accounting, different terms appear again and again that entrepreneurs have to deal with. One of them is what is known as cost unit accounting . You can find out what you mean by this and, above all, what you as an entrepreneur should consider here.
What is a payer?
The sales services or internal services to which the costs from cost unit accounting or cost center accounting are allocated are called cost units.
What is cost unit accounting?
The cost unit accounting is there to inform the entrepreneur about what the previously determined costs were incurred. After cost type accounting and cost center accounting, cost unit accounting is the last step in cost accounting .
What does cost unit accounting say?
The costs are assigned to the individual cost units. It is used to evaluate the costs of production, the evaluation of the cost of goods sold , the determination of lower price limits and offer prices, the determination of internal transfer prices, the calculation of orders and, last but not least, the evaluation of existing inventories. These existing inventories include unfinished products or services in accordance with Section 266 (2) of the German Commercial Code (HGB) .
Distribution of cost unit accounting
With the help of cost unit time accounting, the amount of the total costs of a period in your company is determined. In contrast, cost unit accounting helps to determine the unit costs for individual costs.
The cost unit accounting is also a calculation. It is used to determine the manufacturing costs and the prime costs. The determination is usually made in the form of unit costs. With this information you can carry out an offer calculation.
The cost unit time accounting is also referred to as the operating income statement and income statement . You determine the operating result for a given accounting period. This period can be a month, a quarter or even a year.
In cost unit time accounting, you subtract the costs from the services provided. With this analysis you can determine the contribution of your products or your services to the company’s success. To perform cost unit time accounting, you can either use the cost of sales method or the total cost method.
The cost of sales method is based on the cost units. Here you compare the sales with the costs that can be allocated to them. The total cost method is cost type-oriented. You compare the costs of a billing period with the services.
Cost unit accounting
The cost unit accounting is there to determine the costs per cost unit. You use it to calculate the cost price. Calculations are not always only made when a new product is introduced, but also during ongoing operation and also for the final evaluation. In the simplest case, this calculation can be made by simply dividing the total costs and the services provided for them.
The preliminary costing shows data for the planned provision of services. The preliminary calculation serves as the basis for the pricing of the operating services. But it is not only suitable as a basis for pricing, but also as a cost specification for the cost center.
The interim costing may be necessary for cost objects with longer production times over several accounting periods for accounting or planning purposes. You can interpret it as a kind of post calculation for semi-finished products.
The post calculation is there for the performance control. It compares in detail the numerical values of the preliminary calculation with the corresponding actual consumption values. You can also compare the actual cost of the service with the offer price. It should therefore enable a criticism of the use of the performance factors and a control of the profitability of your company.
Role of the market situation
The market situation plays a decisive role in the calculation. On the one hand there is the progressive calculation , which is there to calculate the sales price based on the costs. The retrograde calculation assesses the cost recovery based on the market price. If you take these two types together, one speaks of so-called target costing . With target costing, you gradually develop a marketable price for your product.
First you have to make sure that you can consider different principles for offsetting the specific costs. These different principles include:
- Causation principle
- Average cost
- Carrying capacity principle
In order to split the costs for the cost units and to be able to calculate the unit costs , there are different calculation methods.
There is a division calculation, there is no separation between individual and overhead costs. On the one hand, the average principle and, on the other hand, the cost-bearing principle. Ultimately, this means that the costs that generate more should also be assigned more costs.
Then there is the equivalence number calculation . You can use these if you are dealing with goods or products of the same type. In addition, there must be a fixed cost ratio between the product types.
The third and final procedure is the overhead calculation . Direct and overhead costs are separated. You assign the individual costs directly to the cost units and the total costs on the basis of key figures in terms of value or quantity. Cost center accounting therefore plays an important role here.
To do a division calculation, you divide all costs incurred in a period by the number of service units produced. Either you take the numbers of the whole company or the numbers of a specific area. However, the calculation only makes sense for a one-product company .
This calculation is used for one-off and series production . The basis of this calculation is the separation of individual and overhead costs related to the cost objects. The overhead costs are calculated using surcharges on the cost units. The percentages in the final costing are determined from the actual costs.
The overhead calculation can offset the company’s total overhead costs with a uniform percentage on the products. The basic structure of the overhead calculation consists of the main cost centers material , production , sales and administration .