Service Costing

Natalie Gray
Mind Map by Natalie Gray, updated more than 1 year ago
Natalie Gray
Created by Natalie Gray about 5 years ago
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Description

Service Costing - CIMA C01 Fundamentals in Management Accounting

Resource summary

Service Costing
1 SERVICE COSTING -costing method applied to a business which provides a service rather than a manufactured product.
1.1 Examples: A Hospital, Firm of Accountancs/Solicitors, Haulage Business, Restaurant, Hotels
2 SERVICE COSTING : Use Composit Cost Units this uses TWO level of activity
2.1 Examples: Cost per Tonne Mile (Shipping, haulage or Transport ) Cost per Passenger per Mile (Bus, Coach or Train) Cost per Patient per Day (Hospital, Cost per Guest per Night ( Hotels)
3 CHARACTERISTICS OF SERVICE COSTING
3.1 INTANGIBILITY - No physical existence of the service unlike a produced item
3.2 LEGAL OWNERSHIP - Little evidence exists for performance, can't return if faulty
3.3 INTANT PERISHABILITY - Services cannot be stored, unused services cannot be stored for later use
3.4 HETEROGENEITY - Not perfectly identical, each service is different each time
3.5 INSEPARABILITY - Service cannot be seperated from the person who provides it
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