Uniform costing is a natural outcome of – Uniform Costing Quiz | Multiple Choice Questions

Uniform costing is a natural outcome of

Uniform costing is a natural outcome of

Table of Contents

a) Inter-firm comparison
b) Cash flow comparison
c) Standard Costing
d) Absorption Costing.

Read more

Cost Sheet and Cost Accounting Quiz – Multiple Choice Questions (MCQs) | Management Notes

Cost Sheet and Cost Accounting Quiz

Cost Sheet and Cost Accounting Quiz

Table of Contents

Material, Labour and Expenses are the three important…………. of cost.

Material, Labour and Expenses are the three important…………. of cost.

A. Methods
B. Elements
C. Techniques
D. Process

Read more

Importance of Budgetary Control – Budgetary Control | Cost Accounting

Importance of Budgetary Control

Importance of Budgetary Control

Budgetary control is a system of planning and controlling costs based on budgets. Keeping track of budgets lays out what is to be accomplished and how it is to be achieved while controlling ensures that the objectives are achieved and actual results do not deviate more than necessary from the original plan. Budgetary control makes all the difference between drifting aimlessly in an uncharted sea and following a well-charted course towards a desired result. It assists in planning, coordination, and control as a valuable management tool.The principal importance of a budgetary control system are enumerated below:

Read more

Objectives of Budgetary Control – Budgetary Control | Cost Accounting

Objectives of Budgetary Control

Objectives of Budgetary Control

For every enterprise, budgetary control involves determining the actual results and comparing them with budgeted figures and standards for the future period. The variance between budgeted figures and actual performance is then calculated. Prior to recording actual results, budgets are prepared.There is a great deal of competition, uncertainty, and risk in the modern business world.

Read more

Financial Statements – Meaning, Nature, Objectives, Attributes, Importance, Limitations and Trends | Introduction to Cost Accounting

Financial Statements

Financial Statements

The term ‘financial statements’ refers to a series of reports and schedules prepared by an accountant at the end of a given period of time for a business enterprise. Financial statements are used by the accounting system as a means to provide summarised information about the financial affairs of the business. They include the Balance Sheet, Profit & Loss Statement, and Income Statement. To give a complete picture of the financial affairs of an organization, an organization may also prepare a Statement of Retained Earnings and a Cash Flow Statement.

Read more

Role of Cost Accounting in Decision Making – Introduction to Cost Accounting | Management Note

Role of Cost Accounting in Decision Making

Role of Cost Accounting in Decision Making

Today’s business environment is such that all enterprises-large, small, for-profit or nonprofit, manufacturing or non-manufacturing-need a variety of cost data for making day-to-day operational decisions. In other words, for the modern cost accountant, a positive emphasis on analysis and interpretation) requires involvement in the dynamic stage of business-the present and the future. During the dynamic phase, the focus is mainly on planning (i.e., selecting objectives and managing their attainment) and controlling (ensuring compliance with established plans).

Read more

Techniques of Costing – Introduction to Cost Accounting | Management Notes

Techniques of Costing

Techniques of Costing

For controlling costs and making managerial decisions, the management uses the following costing techniques:

a) Historical (or Conventional) Costing

It refers to the process of determining costs after they have been incurred. The cost of a product can only be calculated after it has been manufactured. Costs can only be determined through this system, but costs cannot be controlled. Only if future conditions remain the same can it be used as a guide for future production.

Read more

Method of Costing – Introduction to Cost Accounting | Management Notes

Method of Costing

Method of Costing

In every system of cost accounting, the basic principles of cost determination are the same, but the methods of analysis and presentation of costs differ. There are different methods used by businesses because they differ in nature and in what products or services they produce.

Read more

Classification of Costs – Introduction to Cost Accounting | Management Notes

Classification of Costs

Classification of Costs

A) Classification on the Basis of Time

i) Historical Costs: Costs are determined after they are incurred. These costs are available only after the production of a particular item has been completed. They are objective in nature and can be verified using actual data.

ii) Pre-determined Costs: In order to calculate these costs, all factors affecting their amount are specified before they are incurred. The following costs may be incurred:

  1. Estimated costs: It is possible to estimate costs before goods are manufactured; however, this is less precise than standards
  2. Standard costs:These are unique concepts and techniques. The method involves the following:
  • defining predetermined standards for each cost element and for each product;
  • comparing actuals to standards to find variations;
  • determining the causes of these differences and taking appropriate actions.
    Although predetermined, standard costs are derived with a great deal more care than estimated costs.

Read more

Cost Accounting Quiz – More that 100 Set of Multiple Choice Questions (MCQs) | Management Notes

Cost Accounting Quiz

Cost Accounting Quiz

1) Which of these is not an objective of Cost Accounting?

  1. Ascertainment of Cost
  2. Determination of Selling Price
  3. Cost Control and Cost reduction
  4. Assisting Shareholders in decision making

Read more

Scope of Cost Accounting – Introduction to Cost Accounting | Management Notes

Scope of Cost Accounting

Scope of Cost Accounting

The scope of cost accounting goes beyond analyzing the expenses associated with a product or activity. A variety of aspects are taken into account, including types of costs, potential business ventures, budget preparation, and profitability analysis. This information can be used by business owners to make better decisions, eliminate unnecessary expenses, and increase revenue.

The scope of cost accounting is very broad and includes:

Scope of Cost Accounting

A) Cost Ascertainment:

Cost accounting is the process of determining the price of a product or service. Collection of expenses, analysis of expenses, and measurement of production at different stages of manufacturing are included. Different types of production require different methods of costing, such as historical costs, standard costs, process costs, and operation costs.
This can be accomplished in two ways:

  • Post-Costing, in which actual information in financial records is used for cost determination.
  • Continuous Costing, the process of ascertainment is continuous, meaning the cost information is available as and when the particular activity is completed, so that the entire cost of a particular job is available as soon as it is completed.

Read more