4.1 Cost planning and cost accounting

4.1.3 Cost units, cost centres and cost types

Cost unit

Cost units are the units of activity (individual product or service) of an enterprise, such as an order, certain products, product groups, a project, a building application, an operation, a good.

Cost Object Controlling builds on Cost Element and Cost Centre Accounting and is used to determine the total costs for each cost object in an accounting period (Cost Object Time Accounting) or to determine the unit costs for each cost object (Cost Object Unit Accounting).

Cost unit accounting determines the cost price and the sales price of a product or an order (cost unit).

The purpose of cost unit accounting is to show what the costs are for.

Cost centre accounting

A distinction can be made between cost centres if the costs are to be allocated to individual service units such as jobs, departments, projects, processes or locations. The type of cost centre classification is to be defined by each company itself.

Z. E.g. material costs for the production of a service at workstation A, B, C. - Cost centre is the workstation
Z. E.g. manufacturing costs incurred at location A. - Cost centre is the location
Z. E.g. distribution costs incurred in the dispatch department. The cost centre is the shipping department.

Cost-type accounting

Cost-type accounting records and determines costs according to their content. For clarity, certain costs can be grouped into operating costs in the business plan. The type of grouping is company-specific.

Costs are defined in terms of content below. Basic cost types are dealt with in detail elsewhere in the manual.

Material costs : Raw materials, consumables, supplies, working materials and all material costs for the production of products and services;
Raw materials are substances that enter the manufacturing process as main components in the product, e.g. wood in a joinery...;
Operating materials are substances that do not enter into the product but are required in the execution of the manufacturing process, e.g. lubricants, fuel oil, paper);
Auxiliary materials are substances that enter the product as by-products, e.g. glue, paint for furniture, paper for a concept);
Purchased finished parts, are parts that are purchased from other manufacturers and installed in the company's own production, e.g. fittings for kitchens, EDP tools for EDP programmes);
Personnel costs or labour costs: Wages and salaries (see personnel cost calculation module 3), fees, bonuses, allowances, royalties, statutory social security (see module 3), travel expenses, work clothing, insurance, company car, holiday pay, voluntary social benefits, direct insurance, staff training, continued payment of wages in the event of illness (e.g. 6 weeks by the employer, only then does the health insurance pay), severance pay, staff advertisements, etc...;
Social security : Social security contributions are regulated by law. They are paid half by the employer and half by the employee. The amount changes several times a year in some cases. Contributions are levied up to the income threshold. This is the maximum amount of gross salary up to which contributions must be paid to the statutory social security system. Contributions are levied on the gross salary of the employee.
Since the amount fluctuates annually, a personnel cost factor of 20 - 25 % on the employee's gross salary can be calculated in the business plan.
Space costs: rent for offices, workshops, shops, restaurants, halls, etc., plus ancillary costs for energy, installations, cleaning, insurance, taxes, maintenance, vacancy periods, brokerage costs, etc. plus ancillary costs for energy, installations and alterations, cleaning, insurance, taxes, maintenance, vacancy periods, estate agent's fees, etc. The amount of ancillary costs may well be up to 50 % of the basic rent. Space costs in prime locations of cities are considerably more expensive than in peripheral or commercial areas. Rent indexes exist in various cities. When renting space costs, deposits of one to three months' rent are common. The deposit must be placed with the landlord in a special account. For a monthly rent of € 2,000 for a commercial space, a three-month deposit of € 6,000 may be required. This must be taken into account in the financing and capital requirements calculation.
Marketing and advertising costs: (see Chapter 3) Administrative marketing costs, e.g. marketing manager's costs, sales planning costs; revenue-generating marketing costs, e.g. costs of advertising, marketing mix, logo design, sales promotion, public relations, sales force, brochures, etc. Turnover-realising marketing costs, e.g. costs of invoicing, packaging, delivery and order processing.
Insurance does not insure the entrepreneurial risk, but only possible damage (property damage and personal injury) that may occur in a company or privately. (see Insurances)
Accident insurance: All employees of a company are legally insured against accidents in the Berufsgenossenschaft (BG). The accident insurance contribution is determined by risk classes. Companies with a high risk pay more than others. Currently, the average contribution to the BG is 1.3 % of the gross wage in all sectors.
Taxes are legally defined public charges on companies and individuals. (see taxes)
Leasing : The cost of renting assets such as machinery, equipment, vehicles, etc. The leasing rates usually include capital financing by the lessor. Leasing is not an investment but a current operating expense. Thus, leasing does not consume equity or debt capital. Leasing can "preserve" liquidity.
R&D: Costs for research & development, costs for scientists, institutes, products and services, expert opinions, projects, etc.
Capital costs : interest, redemption, risk premiums, advice, etc.
External service costs: transport costs, rents, energy costs, fees, etc.
Overhead costs are overhead costs for overhead, administration, insurances, advertisements, fees, contributions, lawyer, auditor, hospitality, management, organisation, EDP, telephone, internet, communication, advance costs, etc.