There may be very few, if any, materials to worry about
Overheads will comprise the most significant portion of any costs of which, labour costs may well comprise as much as 70%
Service Costing: profit or cost centre?
Many organisations simply want to determine the costs of operating its services from a management control and management information point of view
However, there are many organisations now that operate services for their own organisations as well as sub-contracting them out to other organisations.
Sub-contracting Examples
There are companies that operate their own payroll section for themselves; and offer this service to other organisations as well
Other organisations sell CPU time on their computers at times when they do not use it themselves: for example, in overnight batch work.
