IDEAS home Printed from
MyIDEAS: Log in (now much improved!) to save this article

Extending the Cost Calculation by Allocating Fixed Expeditures Using the Direct-Costing Method

Listed author(s):
  • Prof. Univ. Dr. Ruse Elena


    (Spiru Haret University Faculty of Accounting and Financial Management)

Registered author(s):

    Estimating future costs helps the manager understand how costs evolve, influencing his decision to develop a business strategy. Costs react differently to changes in production volume or in a business in general. There are costs that vary with the volume of production or with development, while others remain fixed regardless of the changes in the volume of activity. Between these extremes we can find costs with their characteristics (variable costs and fixed costs). The type of analysis used in the costs evolution is related to the method of calculation (the total cost analysis or determining the unit cost). The emergence of a calculation method that allows the rapid determination of the production cost but it also helps to establish indicators with a broad spectrum of information needed to ground the decisions for the effectiveness of a business led to the Direct-Costing method. The Direct-Costing method based on regrouping the production costs in variable costs and fixed costs, allows the obtaining of a partial cost, fixed costs being spread over the outcome. Using an improved version that allows the allocation of fixed costs on products plays a key role in the decision making process of the enterprise, leading to a better prediction of both the activity as well as of the outcome which allows choosing the optimum version.

    If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

    File URL:
    Download Restriction: no

    Article provided by Ovidius University of Constantza, Faculty of Economic Sciences in its journal Ovidius University Annals, Economic Sciences Series.

    Volume (Year): X (2010)
    Issue (Month): 1 (May)
    Pages: 1831-1834

    in new window

    Handle: RePEc:ovi:oviste:v:10:y:2010:i:1:p:1831-1834
    Contact details of provider: Web page:

    More information through EDIRC

    No references listed on IDEAS
    You can help add them by filling out this form.

    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

    When requesting a correction, please mention this item's handle: RePEc:ovi:oviste:v:10:y:2010:i:1:p:1831-1834. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Gheorghiu Gabriela)

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If references are entirely missing, you can add them using this form.

    If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.