Full cost accounting

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The full cost accounting refers to all those systems of cost accounting in which all costs to payers will be charged. It is in contrast to partial cost accounting .

Overview of full cost accounting


The aim of full cost accounting is to determine the actual or planned costs of a cost unit (goods, services, products). In addition, the profitability of the creation process should be checked and an income statement should be made possible.


Typically, in full cost accounting, a differentiation is made between the cost types in direct costs and overhead costs , and then with the help of cost center accounting, the overhead costs are offset against the cost unit (product, product) according to the average principle using more or less differentiated charging rates .

As with all cost accounting methods, the retrospective analysis of full cost accounting is unsuitable because it is not linked to the process that has already run, in order to enable a controlling intervention in ongoing business processes.


The main criticism of full cost accounting is that with this method, the costs are charged to the cost bearers regardless of the cause of the costs (in particular the output volume) ( fixed cost proportionalization ). For example, the fixed depreciation costs are assigned to a product, although these costs are incurred completely independently of whether the product is produced at all and, if so, in what number of units. It is also argued that overhead costs are not offset against the cause. Another point of criticism is that the variability of the fixed costs over time is not taken into account (if the time coordinate is high enough, all costs become variable).

If the costs determined are allocated to the product prices , there is still the risk that the current market prices will be exceeded, the sales achieved will fall and the costs allocated to the product will continue to rise, which ultimately causes a downward spiral .

Full cost accounting is not suitable as an instrument for preparing short-term ( operational ) decisions. Due to the exclusive use of past- oriented actual costs and the inclusion of operationally irrelevant fixed costs, a well-founded planning of costs is excluded. A subsequent analysis of the causes of cost deviations is simply impossible due to the lack of planned costs .

Counter arguments

The advocates of full cost accounting, on the other hand, argue that in order to survive, a company must be able to cover all costs in the medium to long term with its sales (long-term lower price limit ) and should therefore allocate all costs to its products. Full cost accounting is mostly used for closed financial years in order to get a precise overview of the cost unit's contribution margin .

An invoice based only on partial costs can lead to the fact that one continues to offer cost units, although they would not be worthwhile considering the total costs, or promotes products that are less profitable than others.

Example: A company is faced with the question of which of its two products should be promoted more in the future. The head office (administration with logistics center) costs 100 k € / year. Product A causes 20% of the costs, product B 80%. Product A has a contribution margin (DB) after deduction of the individual costs of 160 k €, product B of 200 k €. If one were to offset the costs of the head office proportionally (i.e. full cost calculation), product A would now have a DB of € 140k (€ 160k - € 20k) and product B € 120k (€ 200k - € 80k). According to the full cost calculation, product A would be promoted. If the fixed costs are not taken into account, however, product B would be funded.

The full cost calculation is therefore essential for long-term planning.

Practical relevance and case law

Despite decades of severe criticism of this method, full cost accounting in its various variants is still the most common cost accounting method today. According to IAS / IFRS , manufacturing costs , for example in the valuation of inventories ( IAS 2 ) or property, plant and equipment ( IAS 16 ), must be determined using the full cost method. This means that all overhead costs attributable to production are included.

The case law has also dealt with questions of full cost accounting. The Reichsgericht had still - at least in times of war - assumed the full costs and a profit surcharge when determining a reasonable price . The Federal Court of Justice , however, fails to use the full cost model when determining the infringer's profit, but only approves part of the overhead costs (only overhead costs with a direct link to the service provided) and all individual costs. Fixed costs that would have been incurred as pure standby costs “anyway” may not be taken into account . The judgment had only become possible since the partial cost accounting had prevailed in business administration.

See also


  • J. Langenbeck: Cost and performance accounting. 2nd Edition. NWB, Herne 2011, ISBN 978-3-482-58672-9 .
  • S. Schaltegger, R. Burritt: Contemporary Environmental Accounting. Issues, Concepts and Practice. Greenleaf Publ., Sheffield 2000, ISBN 1-874719-34-9 .

Individual evidence

  1. ^ Clemens Kaesler: Cost and performance accounting of the accountants. 4th edition. Gabler Verlag, 2011, ISBN 978-3-8349-6569-1 , chap.
  2. Armin Hegel Heimer: economic management and price intervention. Duncker & Humblot, 1969, DNB 456935789 , p. 123.
  3. a b BGH GRUR 2001, 329, 331 "Overhead judgment"