Average value method
The average value method is a method of cost accounting to determine the imputed interest on objects of depreciable fixed assets .
Mathematical determination
The calculation of the imputed interest takes place with the average value method according to one of the following formulas:
or:
In business administration it is controversial whether the acquisition or replacement costs are to be used as a basis for determining the imputed interest .
Explanation
The calculated depreciation on non-depreciable assets flow into the calculation of a product prices and run with it to sell its products at a continuous paybacks on invested capital . If a machine causes acquisition costs of € 100,000, the full € 100,000 capital is tied up in the machine at the time of acquisition, while only € 0 is tied up in the machine at the end of its useful life. During the service life, an average of € 50,000 capital is tied up in the machine:
If you multiply the average tied up capital by the imputed interest rate, you get the imputed interest to be applied. With an imputed interest rate of z. B. 8%, the imputed interest to be applied to the machine amounts to € 4,000 per year.
Demarcation
In addition to the average value method, a so-called residual value method can also be used to determine the imputed interest. The term residual value method is also used in cost accounting for joint production .
Areas of application
The average value method is used in the context of determining the capital required for operation and in connection with the machine hourly rate calculation .
literature
- Wolfgang Kilger: Introduction to cost accounting . 3rd, revised edition. Business publisher Dr. Th. Gabler GmbH, Wiesbaden 1987, ISBN 3-409-21069-5 .
- Andreas Schmidt: cost accounting, basics of full cost, contribution margin and budgeted cost accounting as well as cost management . 3rd, revised and expanded edition. W. Kohlhammer, Stuttgart Berlin Cologne 2001, ISBN 3-17-017003-1 .
- Edgar Wenz: Cost and performance accounting with an introduction to cost theory . Verlag Neue Wirtschaftsbriefe, Herne / Berlin 1992, ISBN 3-482-45231-8 .