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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.
Reasons for Cost Allocation 1. To provide comparison along with externally provided services: It helps in assessing where to continue the contact or service outsiders. 2.
Elements of Cost Nearly there are three elements of cost - labor, material, and expenses. These are additional divided into indirect and direct material, indirect and direct la
information for the year ended December 31, 2010: Direct labor $16,840 Direct material used 16,300 General and administrative expenses 14,240 Indirect production costs 16,780 Selli
L ABOUR VARIANCES Labour Cost Variance (LCV) Described by the ICMA, London, 'Labour cost variance is the variation between the standard direct wages specified for the pro
Which of the four types of costs would include a CEO's salary? A. Unit-Level B. Batch-Level C. Product Sustaining D. Facility Sustaining
The Butchering Department of the Santa Fe Meat Packing Corporation (a process costing corporation, FIFO costing) had 1,500 units, 1/3 completed at the beginning of the period and 1
Distribution and Selling Cost Budget This is the forecast of all costs incurred in distributing and selling the company's product throughout the budget period. This is closel
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
Moore Corporation follows a policy of a 10% depreciation charge per year on all machinery and a 5% depreciation charge per year on buildings (the corporation uses the nearest full
10) Mike Taylor, the owner of Tennessee River Boat Rentals, is estimating the cost of operating his boat rental company next year. He expects to have 450 rentals during 200Z. The f
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