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The proposal calculation: make or buy decision

Cost Object
As for the cost unit accounting, the cost will be here with the same spreadsheet shows as calculated. In the end, the cost will be deducted from the net sale and save obtained results of operations. The cost carrier time-statement is checked how accurately the previously established Overhead rates are present. The figures of the previous calculation are called NORMAL COST or pre-calculation. The latest figures are the actual costs or actual costing. The results from the comparison between normal costs - actual costs can be read as surplus / deficit in the column. In addition, in Cost Object era, the preliminary cost estimate for individual product groups is presented.



Notes about this example
1. If nothing else is on the task, then the costs Materials, Labor and Overhead (FM + FL) are taken from the actual costs for the normal cost. Reason: The aim of the comparison between actual and standard costs is to check how well the old overhead surcharge rates are still. For this purpose, sufficient to compare the overheads.
2. The sign in surplus / deficit arises when one enters into the calculator Normal cost minus actual costs. Are the old numbers of the normal cost is higher than the current actual costs, so our plan covered more than necessary. (= Overlap). And vice versa.
3. For each product is expected to normal overhead costs overhead rates.
4. The sum of the individual products corresponds to the normal costs overall.
5. There are changes in inventories of work in progress and finished goods. Both are listed separately. The calculation is the same for both. See, above.
6. The calculated cost is deducted from net sales. The result is the conversion result.

WARNING: If you subtract the top value from the lower value (net sales) as the sign of the sales income is just wrong. N-sale proceeds> cost = profit (logical)
7. From the result, the revenue surplus or deficit is added to or subtracted from the total and obtained results of operations.
8. The scheme and the calculation of the results must be trained by practicing several tasks.


Clarification of the calculated production overheads through the pre Machine hour rate


The main cost are caused by the use of machinery. Machines and have had related to the increasing rationalization is becoming increasingly important. With the calculation of the MSS machine costs are determined significantly more accurately, so the quality of the calculation is improved.

In the calculation of the machine hour rate will be multiplied by the time required for the specific task in machine time. This machine-dependent production overheads (FGK) are in production costs with added. For the remainder of the FGK simply RGK (residual overheads) made which are calculated as a percentage of the FL, as otherwise the FGK also.


The proposal calculation


Once you have determined the cost, you will not know at what price we should offer his product. Therefore, at the cost nor the gain you want to make added. Now you still expects the front into the things to which later may pull back the customer. These are the customer's account, the agent's commission and the customer discount. Because of these things the customer later (assuming 100% each) are peeled off again arises in the forward calculation a problem with the percentage basis. This is then more than 100 (in the hundreds). The schema can be seen that:


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