Cost Accounting
Cost accounting is a branch of accounting which deals with cost incurred at the time of production as well as the cost of depreciation of fixed assets. Cost accounting helps in decision making of the company. Cost accounting is also helpful in budgeting management of company.
Historical cost can be defined as the value of the resource given up or the liability that incurred at the time when the resource was given up. The liability may incur in order to acquire the asset or the service when the resource was
Back flush costing is a costing method in accounting in which the cost associated with the production of goods is only recorded when the goods are actually produced, finished or sold. In this method of costing the goods or the products that are not
Non manufacturing overheads cost or non-manufacturing cost is the costs that are associated with the non manufacturing expenses of the business. These expenses may include selling and administrative expense, interest expenses and other kind of expenses that are not the part of the manufacturing
Managed account can be defined as an account that is owned by an investor but it is managed and supervised by a paid and professional money manager. They should not be confused with the mutual funds accounts as the mutual fund accounts are jointly
High-Low Method is used in cost accounting to discern or differentiate the fixed and the variable costs portions from the total cost figure. The high low method is usually used for the mixed costs. A mixed cost is the type of cost that includes
Job Costing is a process of accumulation of production costs that is attributed to the different units of products or groups of units of products. For example if a customer orders for a customized set of furniture the set of furniture will be accounted
A step fixed cost is a type of cost that is not altered along with the certain threshold of high and low activity within the business and is altered only when the thresholds are breached or crossed. When the threshold is breached due to
Cost structure is a structure that refers to the types and proportion of different costs present in a business accounting systems. The main objective to design a cost structure is to define the prices of the products, by product. This concept can be more
It is a process that involves series of steps taken by the business to control the cost of the business by controlling operations and activities related to the cost. There are a number of steps involved in controlling the cost of the business that
Cost Accounting is not a logical and scientific branch of accounting as compared to the other branches. Cost accounting lacks a uniform procedure that can be applied to the businesses of the all industries. There are a number of limitations of cost accounting that
The cost of quality may be defined as the cost associated with manufacturing high quality products according to the money spent by the customer and the expectation of the customer. Company can eliminate any cost associated with the production of the products that don’t
Activity based costing is a costing technique that is based on the cost calculations of all the activities that happen while running a business operation. The activity based costing use an approach of costing where cost of all the activities is assigned to all
Job costing is the measurement or estimation of the cost that is involve in completion of a particular job such as production of goods, manufacturing or cost involved in some other sorts of work. The costs of different accounts are stored in the ledger
This is an accounting method that explains the flow of costs among various operations within a business or a company. The flow of cost system is associated with the production or manufacturing cost activities of the business. The manufacturing costs involve a number of
Generally speaking by cost we mean total amount of money or other resources foregone or sacrificed to procure something or to achieve some objective. Word expense is also used to denote almost the same meaning. The difference between these two is that when benefit
Following is the difference between Financial Accounting and Cost Accounting Financial Accounting Cost Accounting 1.Provides information to external 1.Provides information to internal users. 2. Provides general purpose financial statementsand reports 2. Provides special purpose statements 3. Must conform to generally accepted accounting principles 3.
Cost accounting is now used not only by manufacturing organizations but by service and trading organizations as well, both in profit and non profit sectors of economy. It is used as an aid for planning and control of ongoing operations, for evaluation of alternatives
Cost accounting uses information provided by financial accounting together with much more details of operations of cost accounting is collection, processing and evaluation of operating, data. e.g. cost of products, operations, processes, jobs, quantities of materials consumed, labour time used etc. for internal planning and control