Costing helps an enterprise to determine product costs and thus facilitates planning and control of business activities. It is an important tool, which supplies information for short and long term decision-making. The Reckoner Cost Accounting System supports various methods of costing such as Job Costing, Batch Costing, Process Costing, etc. Select the appropriate costing system, depending upon the type of your industry and manufacturing process.
The system provides for definition of Cost Centers in a hierarchical structure. You can allocate costs to these Cost Centers by using Cost Documents for different cost transactions. The system allows identification of costs under different Cost Heads such as direct materials etc. Optionally, costs can also be tracked for different activities to accommodate Activity-based Costing.
Cost System
Reckoner allows various methods of costing that can be applied in different business enterprises to ascertain costs depending upon the nature of the product, production methods or specific business conditions. Various types of costing systems are defined in this function to support different methods of costing, such as Contract Costing, Unit Costing, Standard Costing, etc.
Click on cost system tab to enter Name of the cost system, Description and Last Analysis Date. Specify the Analysis Frequency (it can be weekly, Fortnight, Daily, etc.). Also, mention whether you want to maintain Standard Cost for materials or labour. Fixed Cost Allocable to products drop-down specifies whether fixed costs are to be allocated to products or can be adjusted to the products directly.
Select Associated Company List tab. To add a row, click on add. Select the Cost System from the drop-down menu, Company (from the drop-down menu) and enter Remarks, if any. Save the record. However, a Company can be associated with only once Cost System.
Cost Centre
A cost center is an organization segment or area of activities for which it is desirable to accumulate and monitor costs. Some costs are directly allocated to cost centers (like direct materials cost, direct labour costs), while others (like travel overheads) are indirect costs. Use this interface to define the Cost Centre location, person or item of equipment (or group of these) for which costs are to be ascertained and used for the purposes of cost monitoring and control.
(Path: Definition → Others → Finance – Cost Centre Definition) 
Click on Cost Centers on the left pane. Right click on the screen and select add rows to add a cost center group. Enter name of the cost center group and add description (of the cost center). Save it.
Now, select the Cost Centre group (defined above) from the left pane. Enter the details like Name, Description, Parent Group of the cost center and Remarks in the Cost Centre Group tab. Click on Group List tab if more cost center groups have to be added else click on Cost Centre List tab for adding Cost Centers. Enter the details on the tab by right clicking and selecting add rows. The Cost Centre has to be at the leaf level. Once a cost center has been added to cost center group, no more subgroups can be added within that group. Save the details on all the tab pages.
Select the Cost Centre on the left pane. On the Cost Centre tab page enter the details like Name, Description and (Cost Centre) Group Name. Specify the nature of the cost center (Permanent or Temporary). If temporary, then select the Start Date and End Date for the cost center to be effective.
In Associated Accounts tab the Accounts with which the Cost Centre is associated are displayed along with the cost allocated to this cost centre by from that account. This association can be made in the Chart of Accounts Definition in the Cost Centre tab of the Account Definition. All the cost centres associated with the Account in the Chart of Accounts will be visible here. One account can be attached to multiple cost centres and one cost centre can have many attached accounts. During voucher entry, the system will show the Cost Sheet tab and will calculate the amount according to the percentage defined in this definition. However, you can change this value at the entry time.
The Associated Product List tab is to associate the Products for which the costs will be incurred by the cost centre. Select add rows from the right click menu. Select the Product, Allocation Percentage and Remarks if any. Click on Save. During Voucher Entry or Cost Sheet Document Entry, the amount for each Product will be automatically calculated based on the percentage defined here.
Click on Save to record these details.
