COST ACCOUNTING

COST:-
Cost is the Amount of expenditure (actual or notional) incurred on,
or attributable to ,a specified thing or activity

Costing:-
Costing is the technique and process of ascertaining costs.

Cost Accounting:-
Cost Accounting is that Branch of Accounting dealing with the
classification,recording,allocation,summerisation and reporting of
current and prospective costs.

Cost Accountancy:-
the application of costing and cost accounting principles, methods
and techniques to the science, art and practice of cost control and
the ascertainment of profitability. It includes the presentation of
information derived there from for the purpose of managerial
decision-making.

Objectives of Cost Accounting:-


Ascertainment of cost
Control of Cost
Determination of Selling Price
To provide a basis for Operating Policy
Frequent preparation of accounts and other
Reports
To provide data for Cost Reduction
Preparation of Cost Estimates
Standards for Measuring Efficiency

Classification And Analysis of Cost

Classification or Analysis is the process of grouping
like facts under a common designation on the basis
of similarities of nature,attributes,or relations.

Methods of Cost Classification:-


Element wise Classification

1. Materials
2. Labour
3. Expenses

Functions wise Classification
1. Factory Cost
2. Administration Cost
3. Selling and distribution Cost
4. Research And Development Cost


Behavior wise Classification
1.Fixed Cost
2. Variable Cost
3. Semi-Variable Cost

Controllability Classification
1. Controllable costs
2. Uncontrollable Cost

Normality Classification
1.Normal Cost
2.Abnormal Cost
Timely Classification
1. Historical Cost
2.Pre-Determined Cost

Association wise Classification
1. Product Cost
2.Period Cost

Investment Wise Classification
1. Capital Cost
2. Revenue cost


Relevancy Classification

1. Relevant Cost
Differential Cost
Opportunity Cost
Out of Pocket Cost
Replacement Cost
Imputed Cost
2.
Irrelevant Cost


Cost Unit
Cost unit is a quantitative unit of product or
service or time in relation to which costs are
ascertained or expressed. Cost units differ from
Industry to Industry.

Cost Centre's
A Location,Person,or item of equipment(or group
of these)for which costs may be ascertained and
used for the purpose of control.
Types of Cost centre's
Production Cos Centre
Service Cost Centre
Personal Cost Centre
Operating Cost Centre
Impersonal Cost Centre
Process Cost Centre

Cost Sheet
A document which provides for the assembly of the
estimated detailed cost in respect of a cost centre or a cost
unit.

Preparation Of Cost Sheets.