Hi Abdullah Very nice lessons. Thank you very much for these explanation. I have one question. I have a scenario where Administrative Cost Center pay expenses as water, electricity and so on for manufacturing cost center. They want to allocate 60% of these expenses to manufacturing cost center and include it in the Actual Product cost. What is the best way to allocate these indirect costs to a product ?Is the Cost Sheet is the best approach ? Do you approach this in these training ? Thank you Regards
Hi William, great question. Whether you allocate through costing sheets or activity types is a business decision, both will work technically. My opinion as explained in the videos, you separate these costs depending on whether they have a logical cost driver, so for electricity for example, you can allocate it through machine hours (activity Type), while the other costs that don't have a logical driver can be assigned in costing sheet with a percentage. This question is not SAP related, this is the structure of the costing process done by the cost accountant, always be sure to finalise all these points and documenting them properly before stepping into the system
Hi Abdullah, Thanks for the comprehensive explanation on the costs' segregation. I've a query. Let us consider the current pandemic situation, where the production is suspended for 1 or 2 months. Anyways, depreciation will be calculated for the idle production machines. In this case, is it necessary to allocate this depreciation cost to the saleable product, once the production resumes? If so, how can we allocate this inflated depreciation to the product?
This is a very important question now, I advise you contact your audit partner and ask how handle this from financial standards point of view There are many impacts on financial reporting in this period, check this document from PWC also www.pwc.com/m1/en/publications/covid-19/in-depth-look-at-current-financial-reporting-issues.pdf
Hi, Abdullah, nice video. Besides raw materials, equipment and labour, you do calculate, rent and utilities to determine the selling price of a chair, right? what about depreciation rate of the equipment, ? this is indirect ?
All the rent, utilities, depreciation are calculated and included in the cost of the product, we then add the needed profit margin % to get to the selling price. Depreciation of production equipment, I would include in the rate of DM, while the other equipment I would include in Overheads Remember that every cost manager can have a different approach
Hi Abdullah I need solve this example *the following information relates to the manufacture of product LL in 20x8 Output unit 200 300 400 Total costs 7000 8000 8600 *for output volumes above 350 unit the variable cost per unit falls 10% *note . The fall applies to all unit not just the excess above 350 Required Estimate the cost product 450 unit of the product LL in 2ox9 Helpe me
Very brilliantly explained in detail ...Thanks. A lot Allah bless you
Thank you Afraz
رهيييب الله يجزاك خير
جزانا الله و اياكم 😁
Thanks Abdullah.. As usual short and sweet
Hope it's not too short :)
Thanks so much
Any time
سلسله رائعه ربنا يجعلها في ميزان حسناتك
امين ... شكرا
Thanks a lot :)
Hi Abdullah
Very nice lessons. Thank you very much for these explanation. I have one question. I have a scenario where Administrative Cost Center pay expenses as water, electricity and so on for manufacturing cost center. They want to allocate 60% of these expenses to manufacturing cost center and include it in the Actual Product cost. What is the best way to allocate these indirect costs to a product ?Is the Cost Sheet is the best approach ? Do you approach this in these training ?
Thank you
Regards
Hi William, great question.
Whether you allocate through costing sheets or activity types is a business decision, both will work technically.
My opinion as explained in the videos, you separate these costs depending on whether they have a logical cost driver, so for electricity for example, you can allocate it through machine hours (activity Type), while the other costs that don't have a logical driver can be assigned in costing sheet with a percentage.
This question is not SAP related, this is the structure of the costing process done by the cost accountant, always be sure to finalise all these points and documenting them properly before stepping into the system
Hi Abdullah,
Thanks for the comprehensive explanation on the costs' segregation.
I've a query. Let us consider the current pandemic situation, where the production is suspended for 1 or 2 months. Anyways, depreciation will be calculated for the idle production machines. In this case, is it necessary to allocate this depreciation cost to the saleable product, once the production resumes? If so, how can we allocate this inflated depreciation to the product?
This is a very important question now, I advise you contact your audit partner and ask how handle this from financial standards point of view
There are many impacts on financial reporting in this period, check this document from PWC also www.pwc.com/m1/en/publications/covid-19/in-depth-look-at-current-financial-reporting-issues.pdf
Hi, Abdullah, nice video. Besides raw materials, equipment and labour, you do calculate, rent and utilities to determine the selling price of a chair, right? what about depreciation rate of the equipment, ? this is indirect ?
All the rent, utilities, depreciation are calculated and included in the cost of the product, we then add the needed profit margin % to get to the selling price.
Depreciation of production equipment, I would include in the rate of DM, while the other equipment I would include in Overheads
Remember that every cost manager can have a different approach
Thanks so much Mr. Abdullah
Could you explain in demo the integration between FICO and PS, and CS
Will do my best!
Any plans to make videos on OBYC settings???
Yes, but after sometime
Hi Abdullah
I need solve this example
*the following information relates to the manufacture of product LL in 20x8
Output unit
200
300
400
Total costs
7000
8000
8600
*for output volumes above 350 unit the variable cost per unit falls 10%
*note . The fall applies to all unit not just the excess above 350
Required
Estimate the cost product 450 unit of the product LL in 2ox9
Helpe me
Hi Abdullah, You can check the CMA groups on Facebook, I'm sure you will get a lot of help there
Hi Abdullah! Could you put subtitles in all of your videos please?
They are automatically added by UA-cam ...are they missing in this video? what other videos are missing the subtitles too?