COST CONCEPTS AND COST ACCOUNTING
COST CONCEPTS AND
COST ACCOUNTING
By:
Aman
Jawahar
Sarika
Deepak
Muneer
CONTENTS
Concept of Cost
Cost Accounting
Terms in Cost Accounting
Elements of Cost
Meaning of Overheads
Classification of Costs
Methods of Costing
Types of Costing
MEANING:
Cost Concept: The term ‘cost’ means the amount of expenses [actual or notional] incurred on or attributable to specified thing or activity. Cost means
‘the price paid for something’.
Cost Accounting: Cost Accounting is concerned with recording , classifying and summarizing costs for determination of cost of products or services, planning, controlling and reducing such costs and furnishing of information to management for decision making. TERMS IN COST ACCOUNTING:
Cost Unit : It is the unit of product, service or time in relation to which costs may be ascertained. Example:
Units of production such as a ream of paper, a tonne of steel, a meter of cable , etc. Units of services such as room per day, beds per day, etc.
Cost Centre : A cost centre is a product, physical place (e.g. sales department) or person within a business that can be held responsible for certain expenses incurred in the running of that business.
Cost Estimation : Cost estimation is the process of predetermining cost of goods and service.
Cost Ascertainment : Cost ascertainment is computation of actual cost incurred.
Cost Allocation : Cost allocation refers to the allotment of all the items of cost to cost centers or cost units.It is the process of charging direct expenditure to cost centers or cost units.
Cost Apportionment : Cost apportionment refers to the allotment of proportions of items of cost to cost centers or cost units. It is the process of charging indirect expenditure to cost centers or cost units.
Cost Reduction: Reducing the existing costs of items or services or salaries. E.g. You must reduce everybody's salary by 5%.
Cost Control: Controlling how much is spent on a certain item or project. Anything
COST ACCOUNTING
By:
Aman
Jawahar
Sarika
Deepak
Muneer
CONTENTS
Concept of Cost
Cost Accounting
Terms in Cost Accounting
Elements of Cost
Meaning of Overheads
Classification of Costs
Methods of Costing
Types of Costing
MEANING:
Cost Concept: The term ‘cost’ means the amount of expenses [actual or notional] incurred on or attributable to specified thing or activity. Cost means
‘the price paid for something’.
Cost Accounting: Cost Accounting is concerned with recording , classifying and summarizing costs for determination of cost of products or services, planning, controlling and reducing such costs and furnishing of information to management for decision making. TERMS IN COST ACCOUNTING:
Cost Unit : It is the unit of product, service or time in relation to which costs may be ascertained. Example:
Units of production such as a ream of paper, a tonne of steel, a meter of cable , etc. Units of services such as room per day, beds per day, etc.
Cost Centre : A cost centre is a product, physical place (e.g. sales department) or person within a business that can be held responsible for certain expenses incurred in the running of that business.
Cost Estimation : Cost estimation is the process of predetermining cost of goods and service.
Cost Ascertainment : Cost ascertainment is computation of actual cost incurred.
Cost Allocation : Cost allocation refers to the allotment of all the items of cost to cost centers or cost units.It is the process of charging direct expenditure to cost centers or cost units.
Cost Apportionment : Cost apportionment refers to the allotment of proportions of items of cost to cost centers or cost units. It is the process of charging indirect expenditure to cost centers or cost units.
Cost Reduction: Reducing the existing costs of items or services or salaries. E.g. You must reduce everybody's salary by 5%.
Cost Control: Controlling how much is spent on a certain item or project. Anything