METHODS OF COSTING

The general fundamental principles of ascertaining costs are the same in every system of cost accounting, but the methods of analysis and presenting the costs vary from industry to industry. Different methods are used because business enterprises vary in their Read More …

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COST CENTRE AND COST UNIT

A cost accountant has to ascertain cost cost centre or cost unit or both. Cost Centre According to the Chartered Institute of Management Accountants, London, cost centre means, “a production or service location, function, activity or item of Read More …

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CLASSIFICATION OF COSTS

The different bases of cost classification are: (1) By time (Historical, Pre-determined). (2) By nature or elements (Material, Labour and Overhead). (3) By degree of traceability to the product (Direct, Indirect). (4) Association with the product (Product, Period). (5) By Read More …

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SCOPE OF COST ACCOUNTING

The Scope of Cost Accounting Is Very Wide and Includes: (a) Cost Ascertainment: The main function of cost accounting is the ascertainment of cost of product or services rendered. It includes collection, analysis of expenses and measurement of production at Read More …

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IMPORTANCE OF COST ACCOUNTING

The limitations of financial accounting have made the management to realise the importance of cost accounting. Whatever may be the type of business, it involves expenditure on labour, materials and other items required for manufacturing and disposing of the product. Read More …

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OBJECTIVES OF COST ACCOUNTING

Cost accounting aims at systematic recording of expenses and analysis of the same so as to ascertain the cost of each product manufactured or service rendered an organisation. Information regarding cost of each product or service would enable the Read More …

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EVOLUTION OF COST ACCOUNTING

The history of accounting is as old as civilization. It is the process of identifying, measuring, recording and communicating economic information, capable of being expressed in terms of money. The utility of accounting information lies in its ability to reduce Read More …

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CONCEPTS OF COST

Cost is the amount of resource given up in exchange for some goods or services. The resources given up are money or money’s equivalent expressed in monetary units. The Chartered Institute of Management Accountants, London defines cost as “the amount Read More …

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