Cost Accountancy

Batch Costing

What is Batch Costing? – Definition Batch costing is nothing but a modified form of job costing in which cost is calculated of each batch of production. This method of costing is applicable in those manufacturing unit, where articles are manufactured in definite batches. This method is also known as ‘Lot Costing’ as products are …

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Output Costing

Output Costing – Definition Output costing is an analysis of the different elements of expenditure so as to find out the factory cost, office cost and total cost per unit. The per-unit cost is arrived at by dividing the total expenditure by the quantity produced. Output Costing – Explanation This costing system is employed in …

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Essential Details You Need To Know About Cost Accounting

Cost accounting is a method of accounting that helps to calculate the cost of different functions of a company, such as production, fixed price along with depreciation of capital equipment. At first, it measures and records these costs individually and then compares the input outcome with the actual result to assist the management of a …

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Essential Factors to be Considered for Designing a Cost Accounting System

For ensuring the efficient and successful operation of the cost accounting system, certain factors are to be given due consideration while designing such a system. These factors may be given as follows: (i) Technical Details of the Business: All the technical details of the business concern, its organizational structure, manufacturing procedure and process, selling and …

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Advantages of Cost Accounting

Cost accounting system renders invaluable services to the manufacturers, management, employees, investors, consumers and Government. These services or advantages may be summarized as follows: (A) Advantages to manufacturers and management The main advantages of a sound cost accounting system to the manufacturers and management are: 1. Ascertainment of cost: The principal object of cost accounting …

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Similarities and Differences Between Cost Accounts and Financial Accounts

Similarities Cost accounts and Financial accounts which are kept quite separate in a business concern, are similar in certain respects while in some other respects these differ from each other. The various  similarities between cost accounts and financial accounts may be given as follows: (i) Both cost accounts and financial accounts are maintained on the …

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Comparison between Cost Accounting and Financial Accounting

Cost accounting is very closely related to financial accounting. It is generally said that the cost accounting system is complementary to the financial accounting system. According to L. W. Hawkins—”the ordinary trading account is a locked warehouse of most valuable information, to which the cost system is the key.” The Trading and Profit and Loss …

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Costing

Definition The Institute of Cost and Management Accountants (ICMA) defines costing as “the techniques and process of ascertaining costs“. This simply speaks of technique and process. To elaborate it can be said that costing is a systematic process of determining the unit cost of output produced or service rendered, It analyses the expenditure incurred on …

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Cost Accountancy

Cost Accountancy has been developed to meet the needs of the management of all those organisations which It has now become an essential part of accountancy which only a few decades ago was very much a part of the financial accounting. The Institute of Cost and Management Accountants, London has defined Cost Accountancy as “the …

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Cost Accounting Cycle

Cost Accounting Cycle embraces activities connected with verification and preparation of source documents, their journalizing, then posting to control accounts and subsidiary ledgers, closing of accounts and presenting results of operations of accounting period in the form of the income statement. Period Covered By Cost Accounting Cycle Accounting period means the time period covered by an …

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What is cost accounting?

Definition of Cost Accounting Cost accounting is the collection, processing and evaluation of operating data e.g., cost of products, operations, processes, jobs, quantities of materials consumed, labor time used etc. for internal planning and control as well as for external reporting. How does cost accounting help In better control over cost? Cost accounting helps in attaining …

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What is cost?

Cost Definition Cost is the sacrifice made, usually measured by the resources given up, to achieve a particular purpose. A sacrifice made in order to obtain some goods or services Costs are not always Expenses. Some costs are Assets, other costs are Expenses Expenses are Expired (Used up) Costs Eventually, costs will become expenses. Explanation …

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Job Costing

What is Job Costing? – Definition Job costing is a system in which costs are assigned to batches or job order of production. Job cost sheet has to be made under this costing system. Job costing is the method of costing which applied to ascertain the costs of specific jobs or work -orders which are treated …

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