Page 61 - F2 - MA Integrated Workbook STUDENT 2018-19
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Cost classification
1.3 The cost card
A cost card is used to show the breakdown of the costs of producing output based on
the classification of each cost. A cost card can be produced for one unit or a planned
level of production.
Example 3
The following shows the calculation of the cost for one unit of product X
$
Direct material 20
Direct labour 10
Direct expenses 15
–––
PRIME COST 45
Variable production overheads 10
–––
TOTAL VARIABLE (MARGINAL) PRODUCTION COST 55
Fixed production overheads 23
–––
TOTAL PRODUCTION (ABSORPTION) COST 78
Non-production cost 22
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TOTAL COST 100
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