CALCULATION OF COMPANY COSTS THROUGH THE DIRECT-COSTING CALCULATION METHOD

Florin-Constantin Dima
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Florin-Constantin Dima: “Constantin Brâncoveanu” University of Piteşti, Piteşti, Romania

CrossCultural Management Journal, 2013, issue 1, 15-21

Abstract: The cost of production has as its starting point the purchase cost of raw materials and consumables, as well as their processing cost and the calculation of the production cost involves complex aspects. This article is based on the two major concepts of costs calculation, namely the concept of full costs and the concept of partial costs, and it analyses the direct-costing calculation method. Necessity of the Development of calculation methods to ensure rapid determination of the cost of production, and the establishment of indicators broad spectrum of information necessary for making decisions to streamline a business activity conducted by direct-costing method. Direct-costing method appeared in the U.S. for the first time in 1934 (applied by Jonathan Harris and G. Charter Harrison). Subsequently, this method was applied to European countries (England, France, Germany etc.). We stopped on this method because it is considered a modern method of costing. Therefore, we analyzed both advantages and limitations of the method in question

Keywords: Production cost; Direct-costing method; Breakeven point; Coverage factor; Dynamic factor of safety (search for similar items in EconPapers)
JEL-codes: M41 (search for similar items in EconPapers)
Date: 2013
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:cmj:journl:y:2013:i:3:dimafc

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