Role Of Cost Accounting

ACKNOWLEDGEMENT

We would like to acknowledge and extend our heartfelt gratitude to the intelligence and co-operation of those people who had been so easy to let us understand what we needed from time to time for completion of this report.

We want to express our special gratitude towards Ma’am Rafia Ayub of Cost Accounting, for giving us such a unique project.

CHAPTER O5: CLASSIFICATION OF COST

Cost can be classified into two categories i.e. product cost and period cost.

5.1.1 Product cost

Product cost includes;

• Direct material

• Direct labor

• Factory overheads

All elements of product cost are already stated above.

5.1.2 Period cost

It consists of all the cost related to Marketing, Selling and Administrative

In the very beginning of this report, we give a brief introduction to this report and then we define the methodology used to support this study while the report is originated on the basis of purely qualitative data.

After that, we give an overview of cost, then we have defined the role of cost accounting that how it helps the management in decision making and highlighted the core sectors where cost accounting is contributing in the current scenario.

As the report focuses on the practices of cost accounting at EBM so, we give a brief introduction of EBM including its organizational chart and major departments. Then we have explained the cost elements that what are the direct material, direct labor and factory overheads the company is supposed to incur for production. Furthermore, we have classified the cost in term of manufacturing and non-manufacturing cost and then we defined the cost in relation to volume i.e. the fixed, Variable and semi-variable cost.

Moreover, we define the costing system of EBM and finally a conclusion of overall report. In the very last, we give recommendation to

Or it may be defined as, the monetary value (or cash equivalent) given up to get an asset.

2.2 THE ROLE OF COST ACCOUNTING

Since cost accounting provides the detailed information about the cost so it helps management in various steps such as make or buy decision, retain or replace an existing machine decision, setting the selling price, inventory control, measure’s the operation’s efficiency, controlling the current operation, taking corrective actions and also it helps in making future plans. In short, it helps managers in decision making.

2.3 CONTRIBUTION OF COST ACCOUNTING

As we all know, cost accounting was introduced initially to serve for manufacturing concerns but now a days it is also used by many service providers for instance, hospitals were amid the first service providers that adopt cost accounting also it has been used by banks and other financial service providers. In addition, it also helps government in management processes i.e. in “value of money” management, budgeting process etc.

In short, cost accounting has a major contribution in an economy.

CHAPTER 03: ENGLISH BISCUIT MANUFACTURERS

3.1 OVERVIEW OF THE