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.
Materials and Inventory Cost Control: After studying this chapter you should be able to: Materials control is the system that ensures the provision of the required quantity and quality at the required time with in the minimum of investment. It covers the following functions:
Direct Method of Cost Allocation-Service Department Costing: Definition: Direct method is a cost allocation method under which any of the allocation base attributable to the service departments themselves is ignored; only the amount of the allocation base attributable to the operating departments is used
Operating Assets Definition: Operating assets are cash, accounts receivable, inventory, plant and equipment, and all other assets held for productive use in an organization.
Direct Method of Cost Allocation-Service Department Costing: Definition: Direct method is a cost allocation method under which any of the allocation base attributable to the service departments themselves is ignored; only the amount of the allocation base attributable to the operating departments is used
Operating Activities Definition: Transactions that enter into the determination of net income.
Open System Definition: Open system is a system that dynamically interact with their environment.
Omnipotent View of Management Definition: Omnipotent view of management is the view that managers are directly responsible for an organization’s success or failure.
Line Definition: A position in an organization that is directly related to the achievement of the organization’s basic objectives.
Last In First Out (LIFO) Method Definition: A method that operates under the assumption that materials issued should carry the cost of the most recent purchase, although the physical flow may actually be different. In other words, the last receipt of materials are issued
Least-Squares Regression Method Definition: A method of separating a mixed cost into its fixed and variable elements by fitting a regression line that minimizes the sum of the squared errors.
Learning Organization Definition: Learning organization is an organization that has developed the capacity to continuously learn, adapt, and change.
Leading Definition: Management function that involves motivating subordinates, influencing individuals or teams as they work, selecting the most effective communication channels, or dealing in any way with employ behavior issues.
Labor Rate Variance Definition: A measure of the difference between the actual hourly labor rate and the standard rate, multiplied by the number of hours worked during the period. Relevant Terms: Labor rate variance Labor Efficiency Variance Materials price variance Materials quantity variance
Labor Efficiency Variance Definition: A measure of the difference between the actual hours taken to complete a task and the standard hours allowed, multiplied by the standard hourly labor rate. Relevant Terms: Labor rate variance Labor Efficiency Variance Materials price variance Materials quantity variance
Knowledge Management Definition: Cultivating a learning culture where organizational members symbolically gather knowledge and share it with others in the organization so as to achieve better performance.
Just in Time (JIT) Definition: Just In Time (JIT) is a production and inventory control system in which materials are purchased and units are produced only as needed to meet actual customer demand. Click here to read full article about just in time (JIT)
Joint Products Definition: Two or more items that are produced from a common input are called joint products.
Joint Product Cost Definition: A joint cost may be defined as that cost which arises from the common processing or manufacturing of products produced from a common raw material. Whenever two or more different products are created from a single cost factor, a joint