COST OF SERVICE COST CENTRE

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....h 4.11 of this standard. It excludes Utilities and Repairs & Maintenance Services dealt with in CAS- 8 and CAS-12 respectively. 1.3 This standard deals with the principles and methods of classification, measurement and assignment of Cost of Service Cost Centre, for determination of the Cost of product or service, and the presentation and disclosure in cost statements. 2. Objective The objective of this standard is to bring uniformity and consistency in the principles and methods of determining the Cost of Service Cost Centre with reasonable accuracy. 3. Scope This standard should be applied to the preparation and presentation of cost statements, which require classification, measurement and assignment of Cost of Service....

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....harges are interest and other costs incurred by an entity in connection with the financing arrangements. Examples are: 1. Interest and commitment charges on bank borrowings, other short term and long term borrowings: 2. Financing Charges in respect of finance leases and other similar arrangements: and 3. Exchange differences arising from foreign currency borrowings to the extent they are regarded as an adjustment to the interest costs. The terms Interest and financing charges, finance costs, and borrowing costs are used interchangeably. 4.7 Marketing overheads: Marketing overheads comprise of selling overheads and distribution overheads. 4.8 Normal capacity: Normal Capacity is t....

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....re. A service cost centre renders services to other cost centres / other units and in some cases to outside parties. Examples of service cost centres are engineering, workshop, research & development, quality control, quality assurance, designing, laboratory, welfare services, safety, transport, Component, Tool stores, Pollution Control, Computer Cell, dispensary, school, crèche, township, Security etc. Administrative Overheads include cost of administrative Service Cost Centre. 5. Principles of Measurement 5.1 Each identifiable service cost centre shall be treated as a distinct cost object for measurement of the cost of services subject to the principle of materiality. 5.2.1 Cost of service cos....

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....ting overheads. 5.3 Finance costs incurred in connection with the Service Cost Centre shall not form part of the cost of Service Cost Centre. 5.4 The cost of service cost centre shall not include imputed costs. 5.5 Where the cost of service cost centre is accounted at standard cost, the price and usage variances related to the services cost Centre shall be treated as part of cost of services. Usage variances due to abnormal reasons shall be treated as part of abnormal cost. 5.6 Any Subsidy / Grant / Incentive or any such payment received / receivable with respect to any service cost centre shall be reduced for ascertainment of the cost to which such amounts are related. 5.7 The cost of production....

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.... 6.3 The most appropriate basis of distribution of cost of a service cost centre to the cost centres consuming services is to be derived from logical parameters which could be related to the usage of the service rendered. The parameter shall be equitable, reasonable and consistent. 7. Presentation 7.1 Cost of service cost centre shall be presented as a separate cost head for each type of service in the cost statement, if material. 8. Disclosures 8.1 The cost statements shall disclose the following: 1. The basis of distribution of cost of each service cost centre to the consuming centres. 2. The cost of purchase, production, distribution, marketing and price of services with reference to sales to....