Prinzip der GRENZPLANKOSTENRECHNUNG

Helps to determine how managerial costs are calculated and assigned to a product or service whereby a standard per-unit-rate for fixed product/service costs and a separate per-unit-rate for proportional product/service costs is used together with strong controlling information and organizational planning.

To understand the principle of Grenzplankostenrechnung, one needs to understand four important elements:

1. Cost-type accounting,
2. Cost center accounting,
3. Product[service] cost accounting, and
4. Contribution margin accounting for profitability analysis.

• Cost-type accounting separates costs like labor, materials, and depreciation, followed by each cost account then being broken down into fixed and proportional costs along with the assignment of these cost accounts to cost centers.

• Cost center accounting  cost centers are defined as the area of responsibility assigned to a manager (performance in this area is rated). A single organization may have 200 to over 2,000 cost centers .

There are two types of cost centers:

• Primary Cost Centers - provide output directly consumed by a saleable product or service such as when related to the service or manufacturing process.
• Secondary Cost Centers - these incur costs but exist to support the functions in the primary cost centers. Examples include: information technology (IT) services and; human resources (HR) perhaps also constulting.