This document discusses different types of operating costing used by service organizations. It provides examples of transport costing, boiler/power house costing, canteen costing, and hospital costing. For each, it identifies the common cost units and major heads of expenditures typically considered in calculating the unit cost of service provided.
This document discusses different types of operating costing used by service organizations. It provides examples of transport costing, boiler/power house costing, canteen costing, and hospital costing. For each, it identifies the common cost units and major heads of expenditures typically considered in calculating the unit cost of service provided.
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This document discusses different types of operating costing used by service organizations. It provides examples of transport costing, boiler/power house costing, canteen costing, and hospital costing. For each, it identifies the common cost units and major heads of expenditures typically considered in calculating the unit cost of service provided.
Copyright:
Attribution Non-Commercial (BY-NC)
Available Formats
Download as PPT, PDF, TXT or read online from Scribd
¢ Operating costing is the method used by undertakings
rendering services, such as transport and electricity, steamship companies , hospitals, restaurants, theaters, travel agencies , schools etc. ¢ |ost per unit = Total operating cost the quantity of service provided |ost unit in operating costing can be divided in to two types. (a) Simple cost unit (b) |omposite cost unit Transport |osting
¢ Under this method , the operating cost of each vehicle is
determined. The common unit of service is tonne kilometer in case of goods transport, and passenger kilometer in case of passenger transport. While, calculating the unit of service , the weight and/or passenger and the distance should be calculated. ¢ In transport costing cost are classified under following three heads. ¢ Fixed cost / Specific cost : Garage charges, Insurance, Taxes , license, time-based depreciation, wages of drivers and cleaners, establishment cost of workshops, general service cost. |onti«
on repairs, maintenance , tyres, tubes, accessories and spares. _ Variable cost / Running expenses : Such cost depends on the trips made and the distance run by the vehicle. These cost include cost of fuel, lubricating oil, depreciation based on run, wages of driver and cleaner etc. aoiler |osting / Power House costing
_ Where steam is used for the purpose of generating electricity, It
is possible to compute the cost of electricity generated by aggregating the steam production costs with other related cost of electricity generation. _ A cost unit is generally in terms of kilograms. _ The main heads of expenditure for a boiler house are as follows: Î Water : Cost of supply, purification Î Indirect Materials : service materials and small tools Î Fuel : Coal or oil Î Labour Î Supervision Î Maintenance Î Overhead cost : Rent , rates, depreciation, insurance and interest on capital |anteen |osting
_ Hotels, restaurants employ operating costing. The total
operation of a hotel is divided into number of cost centers. Î Restaurant- cost unit is number of meals served Î Housekeeping- cost unit is no. of rooms cleaned Î Laundry- cost unit is number of clothes washed The important heads of expenditure is : Î Provisions : Vegetables, fruits, meat . Flour, milk , oil, sugar Î Labour : Salary of cooks, kitchen assistance, supervisors Î service : steam, gas , electricity, power and light Î |onsumable stores : crockery, glassware Î Misc. overheads : Rent , rates, depreciation , insurance Î |redit : |harges of meals. Tea and other sales Hospital costing
_ The hospital services can be divided into the following categories.
Î Outpatient Department Î Wards Î Medical Service Department Î General Services Î Other Service Department