Cost Accounting and Project Financing

• This lecture is titled "Cost Accounting and Project (Financing)"
• Introduction to the topic of cost accounting and project financing.

Structure and System of Cost Accounting

• Cost accounting is structured into three main areas: cost types, cost centers, and cost objects.
• Cost type accounting answers the question: "What costs are incurred?"
• Cost center accounting focuses on the question: "Where are the costs incurred?"
• Cost object accounting addresses: "What are the costs incurred for?"
• Cost type accounting includes personnel costs, material costs, and depreciation.
• Cost center accounting covers procurement, production (1 & 2), administration, and sales.
• Cost object accounting deals with products/orders (unit costing) and periods (month, quarter for period costing).
• Internal service allocation (operating statement) and short-term income statement are also relevant.

Allocation Principles

• Causation principle (or causal principle): Costs are assigned based on cause and effect.
• It is causal for cost centers.
• In a narrower sense, the polluter pays principle means operational assignability.
• Average principle: Costs are allocated based on averages.
• Indirectly dependent on the operational service provision incurred.
• Costs are prorated based on reference variables.
• Economic Principle: Balance costs against benefits appropriately.

Costing and Performance Accounting Systems

• Systems are classified based on the time reference and scope.
• Actual cost accounting: Uses actually incurred costs.
• Normal cost accounting: Uses averagecosts from several past years.
• Standard cost accounting: Uses future costs.
• Full cost accounting: Includes all costs.
• Partial cost accounting: Includes only variable costs.
• Example of actual costs: excess consumption of material.
• Example of normal costs: average loss of receivables of 3% (risk costs).
• Example of standard costs: planned personnel cost increase of 2%.
• Example of full costs: flight costs of 600 EUR.
• Example of partial costs: variable flight costs of 100 EUR.

Differentiation of Cost Types

• Costs are differentiated by type of goods and services consumed.
• Includes personnel and social costs(wages, profit-sharing, imputed entrepreneurial salary).
• Includes overhead costs (operating equipment, business and office equipment).
• Includes capital costs (imputed interest, imputed depreciation).
• Costs for purchased services, licenses, patents, public taxes/fees, insurance costs, risk costs.

Differentiation Based on Allocability

• Costs are categorized as direct or indirect costs.
• Direct costs are directly attributable to a unit (i.e., order or product)
• Direct costs: directly attributable to service (e.g. material.).
• Indirect costs are not directly attributable to a unit.
• Sham overhead costs: Recorded as overhead costs for reasons of economy or simplification.
• Overhead costs: not directly attributable to service (e.g. personnel department).
• Special direct costs: directly attributable to an order, but not to a service (e.g. special tools).

Differentiation Based on Behavior

• Variation of a cost factor impacts costs.
• Considers fixed vs. variable costs and the behavior of costs relative to output/utilization changes.
• Fixed costs: Remain constant regardless of output (e.g., straight-line depreciation for 1 machine).
• Step fixed costs: Remain fixed within a certain range of output (e.g., Depreciation with capacity expansion).
• Variable costs: Change with output.
• Proportional variable costs: Change linearly with output (e.g., Material costs).
• Degressive variable costs: Increase at a decreasing rate with output (e.g., labor costs with learning effect).
• Progressive variable costs: Increase at an increasing rate with output (e.g., Maintenance costs).
• Regressive variable costs: Decrease with output (e.g., Waste).