Professional Documents
Culture Documents
PRESENTED BY:
HIMANI SHIVHARE
KIRAN GUPTA
NIDHI CHAUDHARY
RAGINI SEN
Introduction
Costing has been defined
as “the technique and
process of ascertaining
costs.”
The principles in every type
of costing are same but the
method of analyzing and
presenting the cost differ
with the nature of business.
Methods of costing
Unit costing method
Absorption Uniform
costing costing
1. Standard costing: In this technique the
standards are first set and then they are
compared with the actual costs. The
difference between the standard cost and
the actual cost is known as variance. The
variances are analyzed and the causes
are found out so that the expenditures and
costs can be checked and controlled.
2. Marginal costing: The increase in total
cost by increasing one more unit of the
factor of production is known as marginal
cost. In this, expenses are divided into two
parts i.e. fixed and variable. Marginal
costing takes into account only the
variable factors to find out marginal cost of
production.
3. Direct costing: This technique is, “The
practice of charging all direct costs to
operations, processes or products, leaving
all the indirect cost to be written off against
profits in the period in which they arise.
Here the direct costs are the variable
costs.
4. Absorption costing: In this technique, no
differentiation is made between fixed and
variable costs while determining costs. In
this, both the fixed and variable costs are
charged in the same manner.
5. Uniform costing: when several firms
and industries adopt a common
approach to problems related to costing
then the technique is known as uniform
costing. The firm that adopt this
technique can benefit from expenditure
of one another. Under uniform costing,
an effort is made to establish uniformity
in cost calculation.
CONCLUSION
The methods of costing and the
techniques of costing used in
determination of costs are different for
different groups of industries.
Theoretically all these methods and
techniques are similar but analysis and
presentation of costs for various
industries and for various objectives
become different.