Costs in a company on watch

When one is a company service, the usual thing is to only denominate costs to the costs incurred the benefit of the service.

These costs are conformed by the following elements:

Costs of diverse Provisions

Costs conformed by the purchases that the company realizes to be able to offer to give the service.

Costs of Manpower by the service

Costs conformed by the pays of the workers who offer the service.

Indirect costs

Costs conformed by elements that take part indirectly in the benefit of the service, such as: depreciation, energy, water, telephone, rents, maintenance, repairs, etc.

As we have seen previously, the accounting of costs does not have a method or standard system, but the company adapts the method or system that more is suitable according to its needs or objectives to him.

We see next an example of how to apply the accounting of costs in a company of services:

We suppose that in our repair shop of cars they ask to repair a car to us that presents/displays a shock in the right side, besides a breakage of the light, the costs are:

• Light: $50
• Putty: $5
• Weld: $15
• Manpower $25

How much we must receive by the service to be able to gain 30%?

Total costs	95 (70 + 25)
30% utility	28.5
Sale price	$123.5