A Short Note On Cost Accounting

INTERNAL RESEARCH ASSIGNMENT

Name of the candidate: SWAPNIL SAXENA

Enrollment no. : 09015903915

Course: MBA ( 1st Shift)

Batch: 2015 - 2017

Semester: 1st Semester

Subject Name: Accounting for Management

Subject code: MS - 107

Topic of assignment: Costing

Subject Teacher’s name: Ms. Ethi Jain

Date of submission: october 30, 2015

Q. 1 Given below is a list of ten industries. Give the method of costing and the unit of cost against each industry:

(i) Nursing Home,

(ii) Road Transport,

(iii) Steel,

(iv) Coal,

(v) Bicycles,

(vi) Bridge Construction, vii) Interior Decoration,

(viii) Advertising,

(ix) Furniture,

(x) Sugar company having its

Cost accounting Cost Accounting is a process of collecting, summarizing and evaluating various alternative courses of action. Its objective is to advise the management on the most appropriate course of action based on the cost efficiency and capability. Cost accounting provides the detailed cost information that management needs to control current operations and plan for the future.

Since managers are making decisions only for their own organization, there is no need for the information to be comparable to similar information from other organizations. Instead, information must be relevant for a particular environment. Cost accounting information is commonly used in financial accounting information, but its primary function is for use by managers to facilitate making decisions.

Unlike the accounting systems that help in the preparation of financial reports periodically, the cost accounting systems and reports are not subject to rules and standards like the Generally Accepted Accounting Principles. As a result, there is wide variety in the cost accounting systems of the different companies and sometimes even in different parts of the same company or

Job Costing:

In this case the cost of each job is ascertained separately. It is suitable in all cases where work is undertaken on receiving a customer's order like interior decoration, advertising, etc. In case a factory produces a certain quantity of a part at a time, say 100 items of bicycle, the cost can be ascertained like that of a job. The name then given is Batch Costing.

2. Batch Costing:

Batch costing is the extension of job costing. A batch may represent a number of small orders passed through the factory in batch. Each batch is treated as a unit of cost and separately costed. In this, cost per unit is determined by dividing the cost of the batch by the number of units produced in the batch.

3. Contract Costing

In contract costing the cost of each contract is ascertained separately. It is suitable for firms engaged in the construction of flycovers, roads, dams etc.

4. Single or Output Costing

In this the cost of a product is ascertained, the product being the only one produced like bricks, coals, etc.

5. Process