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Service Costing

A cost accounting method concerned with establishing the costs of services rendered Examples where service costing is applied:
Transport Hotels Hospitals Power Generation units Educational Institutions

The Differences Between Product Costing and Service Costing


Proportion of Direct Material Cost Cost units Use Analysis of costs

Application of Service Costing


Internal Service Department. Service Organisations

Service Cost Units


What are the cost units for a service? Transport Company per km Power Generation per kilowatt hour Hotels per room Hospitals per patient day Canteens per meal

Service Cost Analysis


Standing charges (fixed costs) Running charges (variable costs)

Particulars

Proforma Cost Sheet of a Transport Company


Cost per unit Total Cost

Fixed (Standing) charges License duty & Insurance Garage Rent Administration overheads Drivers , Managers salary Tax Interest Variable (Running) charges Petrol /Diesel Cleaners wages Repairs & Maintenance Tyres & Tubes

Particulars Staff salary

Proforma Cost Sheet of a Power House Company


Cost per unit Total Cost

Fixed (Standing) charges

Administration overheads Depreciation of plant, building Tax Variable (Running) charges Coal Consumes Labour wages Lubricant & oil Repairs & Maintenance Spare parts Total Operating Cost

Proforma Cost Sheet of a Hospital


Particulars Fixed (Standing) charges Rent Staff Salary Administration overheads Depreciation of building Tax Interest Variable (Running) charges Doctors fees Medicines Food Laundry Cost per unit Total Cost

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