A2MAC1 celebrates its 25th anniversary and reaffirms its goal of expanding benchmarking expertise
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The company is also investing more in cost accounting and data analysis solutions.
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Definition of costing
In a narrow sense,Industrial bookkeepingBuilt into the system ofDouble entry bookkeepingRefers to the procedure for classifying, measuring, tabulating, analyzing and reporting product costs based on.1962Published by the Ministry of Finance Corporate Accounting CouncilCosting standard"Stipulates cost accounting in this narrow sense, and is the standard of practice for cost accounting in Japan.
In a broad sense, it refers to the general method for calculating the cost of a product or service.Cost accounting, which is not based on industrial bookkeeping, is also widely applied in practice.In addition, the method used differs depending on the purpose and manufacturing method.In today's case, it is common to think in a broad sense, in which case the meaning of cost accounting isManagement accountingIt is almost synonymous with the meaning of.In other words, everything that contributes to the business management of a business manager can be said to be cost accounting.
Purpose of costing
Those who are new to costing say that the purpose of costing is "to calculate the cost of a product"It's easy to misunderstand..It does cost accounting, but it's just one purpose of cost accounting.Actually, there are many purposes as follows, and if the purpose is different, the target, period, and method of aggregation will be different.
|Purpose of costing||Purpose to help internal business managers||Management decision-making purpose||Strategic and investment decision-making objectives|
|Business decision-making purpose|
|Performance evaluation purpose||Profit management purpose|
|Cost control purpose|
|Purposes to serve external stakeholders||Purpose of preparing financial statements|
As mentioned above, cost accounting has five purposes, but the cost accounting method used differs depending on the purpose.
For example, for the purpose of preparing financial statements, it is necessary to calculate the cost for each product.On the other hand, for cost control purposes, there is no point in calculating costs by product.For example, even if the factory manager points out that the cost of this month's product is 100 yen higher than last month, the reason for the increase is that the cost calculation for each product does not tell which department the cost is high (purchase price). Did the increase in the number of employees? Did the number of employees increase? Is the cost of capital investment high?).This concept is important and even in Europe and Americadifferent costs for different purposes("Different costs for different purposes").
|Cost accounting purpose||unit||Accounting period||Appropriate concept||Accounting technique|
|Purpose of preparing financial statements||Product||1||Product cost and period cost|
|Cost control purpose||Cost responsibility center||Daily, weekly, monthly||Manageable and unmanageable costs||Standard costing|
However, the purpose and method do not always have a one-to-one relationship.One method may serve multiple purposes, or multiple methods may be used for one purpose..
In the construction industry accounting, the purpose of cost accounting can be roughly divided into two. (XNUMX) Disclosure of the company's business results to external stakeholders (elemental cost grasp), (XNUMX) Effective internal control (cost grasp by construction type).
Understanding the cost by element is to classify and aggregate the four elements of material cost, labor cost, outsourcing cost, and expense.The contractor will disclose the completed construction cost report prepared in this category to shareholders, tax offices and investors at the end of each fiscal year.
History of costing
Before the advent of cost accountingCommercial and industrial bookkeepingI had an entry called.This is the so-called "donburi account" and was not an inappropriate technique for relatively small companies.HoweverIndustrial revolutionAs a technique for measuring the actual cost as the number of large companies adopting the modern industrial system increases1870AroundUnited KingdomでStandard costingIs said to have been born.Cost accounting is a product of the Industrial Revolution.
- the 1800s - Standard costingDevelopment of thinking
- 1908Around-(en: Emerson Harrington) Lays the basis for standard costing.
- 1992 -(en: Robert S. Kaplan), (David P. Norton)Balanced scorecardDevised.
Japanese costing standard
In Japan, the Financial Management Committee of the Ministry of Commerce and Industry announced the "Financial Statement Rules" in 1934 and the "Manufacturing Cost Accounting Rules" in 1937, which marked the beginning of the cost accounting system.. After the warMinistry of Finance(At that time) The Corporate Accounting Council published the "Corporate Accounting Principles" in 1949, and the cost accounting standards that were part of it were published in 1962..
Costing standardThe definition of cost accounting is "a technology that expresses manufacturing activities in monetary value by performing certain calculations related to benefits for data received from the financial accounting organization."
The purpose of cost accounting is described in Cost Accounting Standard 2, but it is more limited than the current purpose because it reflects the historical background of nearly half a century ago.For example, the purpose of price calculation in XNUMX is to refer to the government's license fee and procurement fee for supplies, and it has nothing to do with modern corporate management.
- Purpose of preparing financial statements
- Price calculation purpose
- Cost control purpose
- Budget management purpose
- Management decision-making purpose
International financial reporting standards
The International Accounting Standards Board (IASB) has established International Financial Reporting Standards (IFRS).
In September 2002, the Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB) signed a Norfolk agreement to converge US and international standards..
Since 2005, International Financial Reporting Standards (IFRS) has been officially adopted as the financial reporting standard for listed companies in EU countries..
In August 2007, the International Accounting Standards Board (IASB) and the Accounting Standards Board of Japan (ASBJ) signed a Tokyo agreement to converge Japanese accounting standards and international standards..
Cost accounting procedure
Cost accounting flow
According to the cost accounting standard, in principle, manufacturing costs are classified by cost item, then by cost department, and finally by product.
- Calculation by expense item
- This is a method of classifying and measuring cost elements for a certain period by cost item.
- Calculation by department
- The cost elements grasped by the cost item calculation are classified and aggregated by cost department. For the reason that "products are usually completed through several workshops", they are aggregated once into departments and then by product.
- Calculation by product
- Thanks to the calculation by expense item and the calculation by department, it is converted into the form of how much money was spent on which product.
As a general rule, selling, general and administrative expenses are calculated by expense item.
As a result of 3 steps of calculation by expense item, calculation by department, calculation by product, comparison of selling price and cost, reanalysis of planned cost and actual cost, etc.Profitability analysisTo say..Use it for making improvement plans such as improving the efficiency of processes and production lines through comparative analysis of target costs and actual costs..
Definition of cost
"In the cost accounting system, cost is the monetary value of the consumption of goods or services (hereinafter referred to as" goods ") that are grasped in relation to certain benefits in management. " — Cost accounting standard XNUMX,The essence of cost
Criterion 4 further describes four concepts regarding cost.
- Consumption of economic value
- Costs are incurred when you "consume" something that has "economic value", whether tangible or intangible.Therefore, items that have no economic value (air, seawater) even if consumed are not costed.Moreover, even if it has economic value, it will not become a cost unless it is "consumed".
- Relationship with benefits
- Cost is the value that is passed on to the goods produced by management.
- Relationship with management purpose
- Costs are related to management.Therefore, items that have nothing to do with the management of the company are not included in the cost price.
- The cost must be normal and the loss of value due to the abnormal condition is not included in the cost.The "abnormal state" includes an abnormality in the cause and an abnormality in the amount of money.
There are two ways of thinking about cost burden: "cost generation cause principle" and "burden ability principle".The cost-causing principle is the idea of summing up the costs that caused the costs and making them bear the costs.The burden capacity principle is the idea that more profitable items bear more costs from the viewpoint of cost recovery.
The cost-causing principle is the main principle of cost accounting, and is the idea used in the calculation of ordinary product costs.However, in the case of co-products and consolidated costs, it is not possible to reasonably know which product a certain cost was spent on to manufacture.Therefore, the idea of burden ability principle is used as an alternative to the cost generation cause principle.
The basics of cost have been described above, but there are various types of cost and there are several classification methods.
Classification by morphology
If the costs are classified according to the form of occurrence, they can be divided into material costs, labor costs, and expenses.This is the most basic classification method.
|Material cost||Costs incurred by consuming goods|
|Labor cost||Costs incurred by consuming labor|
|Expense||Costs other than material costs and labor costs|
Classification in terms of product relevance
For example, in the case of a factory that makes desks, the consumption of wood corresponds to the material cost.Because this material cost is the cost directly for the product called deskDirect costsare categorized.On the other hand, the salary of the gatekeeper who works at the factory is a labor cost because it consumes labor, but it is not the cost of a product called a desk directly.OverheadIt is classified as.
|Manufacturing direct cost||Material cost||Steel|
|Purchased parts costs||Screw|
ス プ リ ン グ
|Direct labor costs||Casting wages|
Heat treatment wages
|Direct expenses||Outsourced processing costs|
|Manufacturing overhead||Indirect material cost||Auxiliary material cost (painting agent, plating agent, etc.)|
Factory consumables costs (belts, ropes, work gloves, work clothes, sandpaper, grease, light bulbs, etc.)
Consumable tools Equipment costs (tools, equipment, etc. with a useful life of less than one year. Spanners, drills, taps, desks, chairs, fire extinguishers, etc.)
|Indirect labor costs||Indirect wages (repairers, carriers, warehouses, miscellaneous tasks, etc.)|
Salary (wage for clerks, managers, etc.)
Provision for retirement benefits
Inventory depletion cost
Other miscellaneous expenses
Cost in usa
For corporate purposes, cost is a general defense of the valuation of the value that has been (or is likely to be) consciously released when acquiring or creating tangible or intangible economic goods. — American Accounting Association, The Accounting Review Apr 1956
According to American standards, the value released to acquire goods (the cost of purchasing raw materials) is also included in the cost price.
Cost accounting method
Costing # Purpose of costingAs mentioned in, cost accounting has a recurring purpose and an extraordinary purpose.
The cost accounting methods are as follows.
|the purpose||An example||Technique|
|Method before the birth of cost accounting||Commercial and industrial bookkeeping(Incomplete industrial bookkeeping)|
|Pricing / Calculation of period profit / loss||How much to sell a product||Estimated costing|
|Cost control purpose||How much can the price be reduced||Actual costing|
|Profit management purpose||Which product is selling well?|
|Business decision making||Should I make it myself or buy it from outside?Whether to accept or decline the order|
|Management strategy||How to survive the competition||Product portfolio management|
- Job costing
- Total costing
- Comprehensive costing by process (there is a distinction between cumulative and non-accumulative methods)
- Processing cost Total costing by process
Other than product costing and product costing, the following are included in costing in a broad sense.
- Activity Standards Management (ABM)
- Quality costing
- Life cycle costing
- Strategic decision accounting
- Business decision accounting
Certification exam with "cost accounting" in the exam subject
- Nissho Bookkeeping TestLevel 1 (Japan Chamber of Commerce）
- All bookkeeping ability testAdvanced (National Accounting Education Association）
- All business bookkeeping practice testLevel 1 (National Commercial High School Association）
- ^ a b c Yoshiyuki Nagasaka, "Cost Calculation Learned with Excel," 2009, p. 109.
- ^ a b c Yoshiyuki Nagasaka, "Cost Calculation Learned with Excel," 2009, p. 110.
- ^ Yoshiyuki Nagasaka, "Cost Calculation Learned with Excel," 2009, p. 111.
- ^ Yoshiyuki Nagasaka, "Cost Calculation Learned with Excel," 2009, p. 112.
- Kiyoshi OkamotoAuthor "Cost Accounting 2000th Edition" (4/XNUMX)ISBN 4765810097
- Kiyoshi OkamotoAuthor "Cost Accounting Problem Collection" (2005/4)ISBN 4765810100
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