Product costing

[Former Member]

Dear all,

Salary to MD will be captured in Admin cost center. Some percentage of his salary should be apportioned to a production order for calculating the standard cost estimate. how to do that?

Please suggest.

Thanks & Regards,

AR

[former_member188826]

If the MD's cost is justified to be allocated to the products, then costing sheet could be used to allocate costs from cost center to production orders.

[Former Member]

Dear sridhar vasudevan,

Thanks a lot for your reply. Can you please tell how the cost can be allocated from the cost center to the production order using the cost sheet?

Thanks in advance,

Regards,

AR

[Former Member]

Hi,

1. Normally we capture common costs like MD salary in your case to Common cost centers.

2. Then using allocations (Distribution/Assessment), we allocate the costs to Direct Production cost centers or marketing etc.

3. after that, using overheads we assign the costs to production orders, service orders etc.

Calculation of OHs:

1. You need to create a Costing sheet which will have " Base" on which the OH need to calculated, OH Rate, Credit

2.Credit contains the details of Cost center to which this overhead would be credited

I hope you got a clear picture about this.

Please assign points suitably

Best Regards

Surya

[Former Member]

Hi

Thanks a lot for your reply. I have awarded you points. I need further classifications. I have done the cost sheet in the following way. Please tell me wheher it is correct:

Material cost(base)

Material overhead(% on material cost)

Production cost(base)

Production overhead(% on production cost)

Cost of goods manufactured

Admin overhead(% on COGM)

Finance overhead(% on COGM)

COGS

Selling & distribution overhead(% on COGS)

Thanks & Regards,

AR

[Former Member]

Hi frnd,

It seems to be very correct..

Regards,

Jigar

[Former Member]

Hi,

What has been stated is perfectly right.

Go ahead

Surya

[Former Member]

Hi AR,

It is the correct format.

Regards,

Nitin Aggarwal