Costs in a company is a very important component in supporting the implementation of activities to accomplish goals. That goal can be achieved if the costs incurred as a form of sacrifice by the company concerned has been appropriately taken into account. In determining whether a sacrifice is the cost or not, it must first understand the notion of cost include:According Supriyono (1999: 16) cost is the cost of the sacrificed or used in order to earn revenue (revenue) and will be in use as a deduction from income.According to Mulyadi (1999: 8) in the broad sense is the cost: the sacrifice of economic resources, which is measured in units of money, which occurred or is likely to happen to achieve certain goals. In a narrow sense is defined as a sacrifice of economic resources to acquire assets that are called by the term cost, or in other terms the cost is part of the cost of which was sacrificed in an effort to earn revenue.
From the definition above, although there are differences but it seems basically to have in common is the cost of economic sacrifice, which is measured by the value of money to acquire goods or services.Classification of costs or expenses in accordance with the classification of the cost objective itself. For different purposes, it is necessary to charge a different classification.In connection with the foregoing, Supriyono the book Cost Accounting: collection costs and the determination of cost of goods (1999: 18) classifies costs as follows:A. Classification of costs according to the principal function of the activity / activities. On the basis of the principal functions of the activity or activities of the company, the cost can be grouped into:a. Production function, ie all the costs associated with the functions of production or processing of raw materials into finished products ready to sell.b. Marketing functions, ie functions that relate to events completed the sale of products ready for sale with buyers and satisfying way to earn profits according to the company wants to cash collection and sales results.c. General and administrative functions that are related to the activities of policy, direction and control of the company's overall activities in order to succeed in order to (effective) and efficient (inefficient).d. Financial functions, ie functions related to financial activities or the provision of necessary funds company.2. Classification of costs according to the accounting period in which the fee will be charged in order to classify the expenditures (expenditures) will be in touch with any of these expenses will be charged.Classification of expenditure is as follows:a. Capital Expenditure (Capital Expenditures) is spending that would provide benefits (benefit) on some of the accounting period or expenditure that will come. At the time of the expenditure is capitalized into the actual cost, and are treated as expenses in the accounting period to enjoy the benefits.b. Income Expenditure (Revenue Expenditures) that expenditure will provide benefits only to the accounting period in which the expenditure occurs. Generally at the time the expenditure is treated directly in charge, or not capitalized as an asset.3. Classification of costs according to the tendency of the change of volume of activity or activities.Pengolongan costs in accordance with the tendency of the change of activity, especially for the purpose of planning and cost control and decision making. The change tendency of the activity can be grouped into:a. Fixed costsFixed costs have the following characteristics:A. That the total cost remained constant is unaffected by changes in the volume of activity or event up to a certain extent.2. On fixed costs, unit costs (unit cost) will change inversely with changes in sales volume, the higher the volume the lower the unit costs of activities, the lower the volume the higher the unit costs of activities.b. Variable costsVariable costs have the following characteristics:A. That the total cost will change to proportional (proportional) to the change in volume of activity, the greater the volume of activity the higher the number of total variable costs, the lower volume of activity the lower the amount of variable costs.2. On variable costs, unit costs are not influenced by the volume of activity, so the cost is constant.
c. Semi-variable costsSemi-variable costs have the following characteristics:A. That the total cost will change according to changes in the volume of activity, but the nature of the changes are not comparable. The higher volume of activity the greater the amount of total cost, the lower volume of activity the lower the cost, but the changes are not comparable.2. In the semi-variable costs, unit costs will change inversely associated with changes in volume, but its activities are not comparable. Up to a certain level of activity higher volume of activity the lower the unit cost, the lower volume of activity the higher unit cost.4. Classification of costs according to the object or cost centers fundedIn the company's object or cost centers can be connected with the products produced, the existing departments in the factory, marketing area, the parts in other organizations, even individuals.Classification on the basis of cost objects or cost centers, cost can be divided into:a. Direct costs (direct cost)Direct costs are the costs or benefits can be defined for an object or a specific cost center.b. Indirect Costs (Indirect cost)Indirect costs are costs that the occurrence or benefits can not be defined on an object or a specific cost center, or the cost of the benefits enjoyed by some object or cost centers.5. Classification of costs for cost controlTo control the cost information presented to management are grouped into:a. Cost of control (Controllable cost)Controllable costs are costs that are directly affected by a manager / leader position in a certain period of time.b. Uncontrollable costs (Uncontrollable cost)Uncontrollable costs are costs that can not be influenced by a leader / certain positions based on the authority does he have or can not be influenced by an official within a specified time.6. Classification of costs according to the purpose of decision makingFor the purposes of decision making by the management costs can be grouped into:
a. Relevant costs (Relevant cost)Relevant costs are costs that will affect decision making, and therefore those costs should be taken into account in decision making.b. The cost is not relevant (irrelevant cost)Irrelevant costs are costs that do not affect the decision-making, therefore these costs do not need to be taken into account or considered in the decision making process.Classification of costs on the basis of the tendency of changes in the specific activity is very important in the process of profit planning. These costs are divided into fixed costs, variable costs and semi-variable costs. For the purposes of break-even analysis, semi-variable costs will be analyzed further into fixed costs and variable costs.A. Fixed costsFixed costs are costs that remain in the range is the total volume change in a particular activity. According to Mulyadi (1999: 507) stated the fixed costs in relation to the planning and supervision costs, fixed costs can be divided into• Committed fixed cost• Discretionary fixed costCommitted fixed cost is a fixed cost incurred, which can not be reduced in order to maintain the company's ability to meet long-term goals. Example: committed fixed cost is the cost of depreciation, property taxes, rent, insurance and employee salaries principal. Policy to be committed fixed cost is mainly influenced by long-term action plans.Discretionary fixed cost is the cost arising from the provision of budget decisions on a regular basis (usually yearly) which directly reflects the policy of top management on the maximum amount allowed for expenses incurred, and are not able to describe the optimum relationship between the input to the output (which is measured by volume of sales, service or product). Example: discretionary fixed cost is the cost of research and development, the cost of advertising, sales promotion costs, the cost of employee training programs, cost of consultants.2. Variable costsVariable costs are costs that the total volume change is proportional to the change in activity. An example is the cost of raw materials and direct labor costs. For the purposes of planning and control, variable costs can be divided into:• Engineered cost variables• Discretionary costEngineered variable cost is the cost of having a particular physical relationship to the size of certain activities or costs between inputs and outputs have a close and real. For example: the cost of raw materials.Discretionary costs are variable costs are proportional to the total volume of activity as a result of changes in policy / management decisions. For example: the cost of advertising is determined by management.3. Semi-variable costsSemi-variable costs are costs that have fixed and variable elements in it. Element of fixed costs is the sum of the minimum cost for providing services while the variable element is part of the semi-variable costs are affected by changes in the volume of activity.Semi-variable costs have an element of fixed costs and variable costs. To separate the semi-variable costs into fixed costs elements and variable costs, there are two approaches used are:a. Approach to the analysis (Analytical approach)In this approach held between the technical cooperation with the preparation of the budget to conduct investigations into any activity or work, to determine whether or not a fee, the amount of charge on a variety of activities for a particular job, the method is the most efficient execution of work, and the amount of fees concerned with the implementation of the work at various levels of activity.b. The historical approach (Historical approach)This approach tries to determine the cost function by analyzing the behavior of the costs incurred in the past in relation to the volume of activity. In the historical approach, cost data for several periods were collected and counted the cost of fixed and variable costs by using certain methods.There are three methods you can use are:A. Awake Cost Method (Stand by Cost Method)This method tries to calculate some of the costs incurred if the company should remain closed for a while, so the product is equal to zero. This fee is called the cost of waking, and wake up the cost of this is the part that remains.2. Highest and Lowest Point method (Hight and Low Point Method)This method is a variable cost separation technique by comparing the cost at the highest level of activity compared with the cost at the lowest level of activity in the past. Difference in the calculated cost is the variable cost element in the cost. While reducing the cost of semi-fixed costs to variable costs variables.
3. Least Squares method (Least Square Method)This method assumes that the relationship between cost and volume activity with straight-line equation.Y = a + b x
Where:Y = Total cost of semi-variablea = fixed costsb = unit variable costn = Number of datax = Volume of activities
From the definition above, although there are differences but it seems basically to have in common is the cost of economic sacrifice, which is measured by the value of money to acquire goods or services.Classification of costs or expenses in accordance with the classification of the cost objective itself. For different purposes, it is necessary to charge a different classification.In connection with the foregoing, Supriyono the book Cost Accounting: collection costs and the determination of cost of goods (1999: 18) classifies costs as follows:A. Classification of costs according to the principal function of the activity / activities. On the basis of the principal functions of the activity or activities of the company, the cost can be grouped into:a. Production function, ie all the costs associated with the functions of production or processing of raw materials into finished products ready to sell.b. Marketing functions, ie functions that relate to events completed the sale of products ready for sale with buyers and satisfying way to earn profits according to the company wants to cash collection and sales results.c. General and administrative functions that are related to the activities of policy, direction and control of the company's overall activities in order to succeed in order to (effective) and efficient (inefficient).d. Financial functions, ie functions related to financial activities or the provision of necessary funds company.2. Classification of costs according to the accounting period in which the fee will be charged in order to classify the expenditures (expenditures) will be in touch with any of these expenses will be charged.Classification of expenditure is as follows:a. Capital Expenditure (Capital Expenditures) is spending that would provide benefits (benefit) on some of the accounting period or expenditure that will come. At the time of the expenditure is capitalized into the actual cost, and are treated as expenses in the accounting period to enjoy the benefits.b. Income Expenditure (Revenue Expenditures) that expenditure will provide benefits only to the accounting period in which the expenditure occurs. Generally at the time the expenditure is treated directly in charge, or not capitalized as an asset.3. Classification of costs according to the tendency of the change of volume of activity or activities.Pengolongan costs in accordance with the tendency of the change of activity, especially for the purpose of planning and cost control and decision making. The change tendency of the activity can be grouped into:a. Fixed costsFixed costs have the following characteristics:A. That the total cost remained constant is unaffected by changes in the volume of activity or event up to a certain extent.2. On fixed costs, unit costs (unit cost) will change inversely with changes in sales volume, the higher the volume the lower the unit costs of activities, the lower the volume the higher the unit costs of activities.b. Variable costsVariable costs have the following characteristics:A. That the total cost will change to proportional (proportional) to the change in volume of activity, the greater the volume of activity the higher the number of total variable costs, the lower volume of activity the lower the amount of variable costs.2. On variable costs, unit costs are not influenced by the volume of activity, so the cost is constant.
c. Semi-variable costsSemi-variable costs have the following characteristics:A. That the total cost will change according to changes in the volume of activity, but the nature of the changes are not comparable. The higher volume of activity the greater the amount of total cost, the lower volume of activity the lower the cost, but the changes are not comparable.2. In the semi-variable costs, unit costs will change inversely associated with changes in volume, but its activities are not comparable. Up to a certain level of activity higher volume of activity the lower the unit cost, the lower volume of activity the higher unit cost.4. Classification of costs according to the object or cost centers fundedIn the company's object or cost centers can be connected with the products produced, the existing departments in the factory, marketing area, the parts in other organizations, even individuals.Classification on the basis of cost objects or cost centers, cost can be divided into:a. Direct costs (direct cost)Direct costs are the costs or benefits can be defined for an object or a specific cost center.b. Indirect Costs (Indirect cost)Indirect costs are costs that the occurrence or benefits can not be defined on an object or a specific cost center, or the cost of the benefits enjoyed by some object or cost centers.5. Classification of costs for cost controlTo control the cost information presented to management are grouped into:a. Cost of control (Controllable cost)Controllable costs are costs that are directly affected by a manager / leader position in a certain period of time.b. Uncontrollable costs (Uncontrollable cost)Uncontrollable costs are costs that can not be influenced by a leader / certain positions based on the authority does he have or can not be influenced by an official within a specified time.6. Classification of costs according to the purpose of decision makingFor the purposes of decision making by the management costs can be grouped into:
a. Relevant costs (Relevant cost)Relevant costs are costs that will affect decision making, and therefore those costs should be taken into account in decision making.b. The cost is not relevant (irrelevant cost)Irrelevant costs are costs that do not affect the decision-making, therefore these costs do not need to be taken into account or considered in the decision making process.Classification of costs on the basis of the tendency of changes in the specific activity is very important in the process of profit planning. These costs are divided into fixed costs, variable costs and semi-variable costs. For the purposes of break-even analysis, semi-variable costs will be analyzed further into fixed costs and variable costs.A. Fixed costsFixed costs are costs that remain in the range is the total volume change in a particular activity. According to Mulyadi (1999: 507) stated the fixed costs in relation to the planning and supervision costs, fixed costs can be divided into• Committed fixed cost• Discretionary fixed costCommitted fixed cost is a fixed cost incurred, which can not be reduced in order to maintain the company's ability to meet long-term goals. Example: committed fixed cost is the cost of depreciation, property taxes, rent, insurance and employee salaries principal. Policy to be committed fixed cost is mainly influenced by long-term action plans.Discretionary fixed cost is the cost arising from the provision of budget decisions on a regular basis (usually yearly) which directly reflects the policy of top management on the maximum amount allowed for expenses incurred, and are not able to describe the optimum relationship between the input to the output (which is measured by volume of sales, service or product). Example: discretionary fixed cost is the cost of research and development, the cost of advertising, sales promotion costs, the cost of employee training programs, cost of consultants.2. Variable costsVariable costs are costs that the total volume change is proportional to the change in activity. An example is the cost of raw materials and direct labor costs. For the purposes of planning and control, variable costs can be divided into:• Engineered cost variables• Discretionary costEngineered variable cost is the cost of having a particular physical relationship to the size of certain activities or costs between inputs and outputs have a close and real. For example: the cost of raw materials.Discretionary costs are variable costs are proportional to the total volume of activity as a result of changes in policy / management decisions. For example: the cost of advertising is determined by management.3. Semi-variable costsSemi-variable costs are costs that have fixed and variable elements in it. Element of fixed costs is the sum of the minimum cost for providing services while the variable element is part of the semi-variable costs are affected by changes in the volume of activity.Semi-variable costs have an element of fixed costs and variable costs. To separate the semi-variable costs into fixed costs elements and variable costs, there are two approaches used are:a. Approach to the analysis (Analytical approach)In this approach held between the technical cooperation with the preparation of the budget to conduct investigations into any activity or work, to determine whether or not a fee, the amount of charge on a variety of activities for a particular job, the method is the most efficient execution of work, and the amount of fees concerned with the implementation of the work at various levels of activity.b. The historical approach (Historical approach)This approach tries to determine the cost function by analyzing the behavior of the costs incurred in the past in relation to the volume of activity. In the historical approach, cost data for several periods were collected and counted the cost of fixed and variable costs by using certain methods.There are three methods you can use are:A. Awake Cost Method (Stand by Cost Method)This method tries to calculate some of the costs incurred if the company should remain closed for a while, so the product is equal to zero. This fee is called the cost of waking, and wake up the cost of this is the part that remains.2. Highest and Lowest Point method (Hight and Low Point Method)This method is a variable cost separation technique by comparing the cost at the highest level of activity compared with the cost at the lowest level of activity in the past. Difference in the calculated cost is the variable cost element in the cost. While reducing the cost of semi-fixed costs to variable costs variables.
3. Least Squares method (Least Square Method)This method assumes that the relationship between cost and volume activity with straight-line equation.Y = a + b x
Where:Y = Total cost of semi-variablea = fixed costsb = unit variable costn = Number of datax = Volume of activities
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