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Cost Accounting
Cost accounting has been defined via many accounting scholars in different forums. There is no single watertight definition of cost accounting, however the various definitions all point to specific common aspects to the subject. Underneath are some definitions provided by certain authorities as:
"That part of management accounting such establishes standard costs and budgets and actual costs of processes or operations, products or departments and the analysis of variances, social or profitability use of funds" by Chartered Institute of Management Accountants - CIMA. "Which identities, such defines measures, analyses and reports the different elements of indirect and direct costs associated along with producing and marketing goods and services. However Cost accounting measures performance, productivity of quality and product quality" by Letricia Gayle Rayburn. "The systematic process of summarizing and collecting, recording data regarding the different resources and activities into a firm hence like to calculate the basis of production costs employed in financial accounting or making another relevant decisions in a firm by Horngren C.T
Conversely Cost accounting is broad and extends beyond to calculate production costs for inventory valuation that government-reporting requirements largely dictate. Though accountants do not permit external reporting requirements to find out how they measure and control internal organizations activities. During this fact, cost accounting focus is shifting for financial reporting from inventory valuation to costing for decision making. The most important objective of cost accounting is communicating financial information to management for planning, evaluating and controlling performance, and to assist management also to create more informed decisions. Its data is employed by managers to guide their decisions.
USES O F CVP ANALYSIS 1. .It allows preparation of flexible budgets. 2. It provides help in forecasting accurate profit. 3. It aids in formulating price policy. 4
MARGINAL COSTING AND DIFFERENTIAL COSTING 1. Differential costing can be used both in case of marginal costing and absorption costing. 2. In case of marginal costing
A company is investigating the effect on its cost of capital with respect to the tax rate. Suppose there is a capital structure of 20% debt, 10% preferred stock, and 70% common sto
You are provided with the subsequent information relating to Cello Ltd. The accountant is currently preparing the budget for the next three months ending 30 June 2010.
Assumptions of CVP This chapter has given information on how to apply CVP for the business analysis. Most of this analysis is keyed to the model of how profitability is impacte
From the following data write the standard cost card for one unit of the sole product manufactured. Standard Cost card for One U
Total Variable Overheads Variances If Variable Overhead Expenditure Variance = Shs.1, 330 Variable Overhead Efficiency Variance = Shs.320 Then total variable overheads
Purposes of Overhead Cost Analysis There are a number of situations whether the analysis of overhead costs will assist in the satisfactory evaluation of the relevant cost data
what is the different between Financial accounting and management accounting?
Flexible budgeting is a reporting system wherin the
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