Secondary costs
Secondary costs are a collective term used in business cost accounting for all costs of production factors that the company produces itself. They are converted to the end cost centers within the internal activity allocation .
Secondary costs are also divided into variable costs and fixed costs (sometimes also referred to as tertiary costs ) in the context of partial cost accounting .
Various methods are used for secondary cost allocation
As a rule, attempts are made to offset the costs charged as much as possible according to the cost cause. Often, however, a compromise has to be found between recording the cost-causing causal relationships as precisely as possible and an economic recording and billing effort.
In order to differentiate the secondary cost allocation, the secondary costs are classified into secondary cost types , whereby different cost types are usually used for different allocation causes. In addition, the types of costs can also be typified according to the different procedures.
example
A company has a canteen. The employees in the production department use this canteen for lunch. The canteen cost center incurs primary costs in the form of electricity costs, food costs, wages for the cook, etc. Of these primary costs, 20% are not covered by menu prices and are borne by the employer. As secondary costs, therefore, 20% of these cost loads on the "Canteen" cost center are offset against the various production cost centers using the secondary cost type canteen costs. However, the billing is not based on the meals actually sold, but based on the number of employees per production department.
See also
- Primary costs
- Operating accounting sheet (BAB)
- Cost type accounting
- Cost center accounting
- Cost unit accounting
