Table of Contents
Definition of the full cost accounting system
A full cost accounting system allocates the entire costs to the cost objects, ie both fixed and variable cost components. It is often used in practice, although the passing on of all costs to the cost bearers can lead to wrong decisions because they are ultimately not fair to the cause.
Differentiation between full cost accounting systems
The full cost accounting systems can be based on Actual costs, Normal costs and planned costs can be used. Accordingly, a distinction is traditionally made between:
- Actual cost accounting
- Standard cost accounting
- Planned cost accounting
Process cost accounting
In recent years, process costing has been mentioned as another full cost accounting system, which takes into account that products use different activities or sub-processes. However, it is (not yet) very widespread in corporate practice.
With the full cost accounting systems, the cost cycle is carried out by first checking in the cost type accounting whether there are direct costs or overhead costs. This is followed by a separate treatment. Due to increasing mechanization, the fixed costs in companies continue to rise. On the other hand, they are distributed among the cost units, although they are not directly related to the output quantities, but are time-dependent.