Direct costs of a product or service are those items that are easily traced to the product or service. Direct labor and direct material costs are direct costs.Variables: Direct labor, direct materialCalculation: Sum of all direct labor and direct material costs.Measured as: Value ($/€), Interpretation of results: Lower is better
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Period costs are those costs that are expensed in the period in which they are incurred. They include all non-manufacturing accounting costs incurred to sell the product, e.g. administration, distribution, warehousing and selling.Variables: All costs expensed in the period in which they are incurred.Calculation: Sum of the period costsMeasured as: ...
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Posted in All private sectors, Finance & Control, Financial, KPI | No Comments »
Product costs include all those accounting costs incurred to manufacture a product. These type of costs are inventoried and expensed only when the product is sold.Variables: All costs to manufacture a productCalculation: Sum of all costs to manufacture a productMeasured as: Value ($/€), Interpretation of results: Lower is better
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The part of the total costs that changes (arises) by producing one more unit.Variables: Marginal costsCalculation: Sum of the marginal costsMeasured as: Value ($/€), Interpretation of results: Lower is better
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The part of the net sales that's spent to administration.Variables: Administration costs, net salesMeasured as: Rate (%), Calculation: (total administration costs / net sales) x 100
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Posted in Finance & Control, Internal Process, KPI | No Comments »
