1. PA302 COST ACCOUNTING COST ELEMENTS
Prepared by :Wan Maimunah Wan Ishak
Politeknik Sultan Haji Ahmad Shah, Kuantan

2. Students will be able to classify the elements of cost
3-2
Specific Objectives :
Students will be able to classify the elements of cost
Learning objective number 1 is to identify and give examples of each of the three basic manufacturing cost categories.

3. Manufacturing activities
Cost Accumulation
Raw material
Labour
Direct Expenses
Overhead

4. Production Cost 2 1 3 4 m) RM DE Production OH DL
Cost that cannot be charged directly to the product
Eg : Depre of machine
Cost that can be directly charged to product
Eg : Wood in furniture industries
Cost for skilled or unskilled workers who involved directly in production
Eg : Carpenters/Machine operators in furniture industries
Any expenditure other than RM or DL that are directly incurred for the particular product
Eg : Hiring of special machine./tools

5. Examples : Activities DM DL DE Production OH Clothes Tailor
Clothing Company
Clothes
Tailor
Royalty on Patent
Factory Supervisor
Bakery ?

6. Specific Objectives 2 :
Preparing Statement of Cost

7. Company XXX Statement of Cost
Direct material
Opening stock of DM XXX
+ Purchase XXX
- Closing stock of DM XXX
DM used XXX
Direct Labour XXX
PRIMARY COST XXX
Production OH :
Indirect labour XXX
Depre of machine XXX
XXX
XXX
+ Opening stock of WIP XXX
- Closing stock of WIP XXX
Production Cost XXX

8. + Administration OH:
Clerk salary XX
Manager’s salary XX XX
+ Selling & Distribution OH :
Sales expenses XX
Promotion XX XX
XXX
+ Opening stock of FG XX
_ Closing stock of FG (XX)
TOTAL COST XXXX

9. Contoh
Reflection :
Do some reflection !!

10. Exercise : Question 1 : Cost information of a company :
Direct material 2,000,000
Indirect material 50,000
Advertising 95,000
Direct Labour 650,000
Indirect labour 170,000
Production supervisor’s salary 45,000
Depre for Factory building 65,000
Depre for office building 35,000
Factory machine’s depre 20,000
Maintenance department’s cost 100,000
Administration cost 150,000
Promotion 10,000
Sales commission 5,000
Office rent for salesman office 15,000

11. Calculate :
Total production OH cost
Total direct cost
Total production cost
Total indirect cost

12. Solution : a. Total production OH cost Indirect material 50,000
Depre factory building
65,000
Depre factory machine
20,000
Indirect labour
170,000
Maintenance dept cost
100,000
Factory supervisor
45,000
Total production OH
450,000

13. Solution : b. Total direct cost Direct material 2,000,000 DL 650,000
2,650,000
c. Total production cost DM
2,000,000 DL
650,000 OH
450,000
Total production cost
3,100,000

14. Solution : d. Total indirect cost Production cost 450,000 Advertising
95,000
Depre office building
35,000
Admin cost
150,000
Promotion
10,000
Commission
5,000
Office rent for salesman
15,000
Total
760,000

15. Question 2 :
Prepare Statement of Cost based on the following cost information : RM
Sales ,000
Purchase of raw material 12,500
DL 9,500
Production OH 5,000
Freight inwards of RM 200
Factory supervising 700
Opening stock :
RM 2,000
WIP 550
FG(1100 units) 1,650
Closing stock :
RM 2,300
WIP 1,000
FG(3500 units) 5,250
Advertising & marketing cost is RM0.50/unit sold. There were 30,000 units produced.

16. NIAT
USAHA
DOA
BERJAYA
TAWAKKAL
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