service costing a cost accounting method concerned with establishing the costs of services rendered...
Post on 20-Jan-2016
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Service Costing A cost accounting method concerned with
establishing the costs of services rendered Examples of where service costing is applied:
Transport Hotels Tourism Solicitors Education Retail distribution Financial services
Service Costing Service costing is also applied within a
manufacturing setting For example: a manufacturer might wish to calculate
the costs of the following services: Transport Catering Computing and IT Accounting Human resources
The Differences Between Product Costing and Service Costing
There may be very few, if any, materials to worry about
Overheads will comprise the most significant portion of any costs of which, labour costs may well comprise as much as 70%
Service Costing: profit or cost centre?
Many organisations simply want to determine the costs of operating its services from a management control and management information point of view
However, there are many organisations now that operate services for their own organisations as well as sub-contracting them out to other organisations.
Sub-contracting Examples
There are companies that operate their own payroll section for themselves; and offer this service to other organisations as well
Other organisations sell CPU time on their computers at times when they do not use it themselves: for example, in overnight batch work.
Service Cost Units
What are the cost units for a service? Transport -
canteen services, office services, janitorial staff
housekeeping, meals, room service
Passenger miles, tonne miles, total miles driven
Hotels -
Education –
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