Hum 5611: Project Management and Accounting

Department of Architecture
Dhaka University of Engineering and Technology (DUET)
( Lecture 11: Accounting)"

 Course Mentor and Guide:

Md. Mazharul Alam Mahi (Mazhar),
BBA (AIS) MBA (AIS) and MBA (HRM, IBA) RU, GTI (Education), PGD
(SCM & HET)
Assistant Professor (Industrial and Financial Accounting)
Department of Humanities and Social Sciences (HSS)
Dhaka University of Engineering and Technology (DUET)
Cell No. +8801936443669, +8801626334961
Email:mahimazhar@yahoo.com,mazharulalammazhar@gmail.com,
mahimazhar@duet.ac.bd
Methods of costing
 Job Order Costing: job costing systems assign costs to
distinct production jobs that are significantly different.
 Contract Costing: Contract costing is applied for
construction related work such as Tendering
 Batch Costing: A batch is a group of identical products
 Process Costing: Process costing is a form of operations
costing which is used where masses of identical or similar
units of a product or service standardized homogeneous goods
are produced.
 Service (Operating) Costing: Service or operating costing is
practiced in service providing organization
 Multiple Costing:
Classification of Costs
 Manufacturing Costs: Direct Materials Direct Labor , Other
Direct expenses
 Manufacturing Overhead : Indirect materials , Indirect labor
, Other indirect expenses

 Non-manufacturing Costs: Marketing or selling expenses ,

Administrative expenses ,
 Product cost :includes all the costs that are involved in
acquiring or making a product
 Period costs : are all the costs that are not included in product
costs
Types of costs in Production
a. Fixed costs: costs that don’t vary with output
b. Sunk costs : costs that cannot be recovered on leaving industry,
e.g. advertising
c. Variable costs : costs relating to how much is produced (e.g. raw
materials
d. Semi-variable costs: costs like labour which to some extent
depend on output.
e. Marginal Cost: This is the cost of producing an extra unit.
f. Short-run costs :(subject to diminishing returns)
g. Long-run costs: (potential economies and diseconomies of scale.
h. Sunk costs: Cannot be recovered if a firm goes out of business.
j. Opportunity Cost: A benefit, profit, or value of something that
must be given up to acquire or achieve something else.
Elements of Cost of Production
1. Materials
2. Labor
3. Production Overhead
Direct material: The cost of wood used to create the tables.
Direct labor: The cost of wages and benefits for the carpenters
to create the tables.
Manufacturing overhead (indirect material): The cost of nails
used to hold the tables together.
Manufacturing overhead (indirect labor): The cost of wages
and benefits for the security guards to overlook the
manufacturing facility
Manufacturing overhead (other): The cost of factory utilities.
Elements of Production
 Objects of Production: The Product Materials, Semi finished & Finished
Goods

 Agents of Production: The people in charge of Product, The Machines,

Tools, and other equipment assisting them. Man, Machines, Tools, Jigs,
Gagging

 Methods: Means by which actions are performed Work Instructions,

Procedures, Manuals

 Space: Where actions are performed and the locations to and from which
objects are transported. Processing system, Balanced Load and Capacity,
Processing Condition

 Time: The timing of work or how long action take. Time and Timing
Thank You