ABSTRACT
This chapter explains costing and then finds the cost of each unit of production whether it is a particular contract or article or a machine consisting of innumerable parts, the cost of each part, and the various operations upon each part, having to be independently determined. In the process cost groups the principle is to allocate the direct charges to the processes where they are incurred and also to dissect the indirect expenses to allocate these as far as possible to the processes for which they are required. In the final cost summaries the cost of each machine will be set out to show the items for each part under the separate headings of labour, material, sundry charges and on cost in each case. Indirect expenses are referred to by various terms such as factory expenses, overhead, burden, on cost; all of these signify the expenses of running the manufacturing operations which can only be allocated by indirect means.
