chapteri basicconcepts 100217174049 phpapp01

8/9/2019 Chapteri Basicconcepts 100217174049 Phpapp01

1/14

Basic Concepts

Cost & ManagementAccounting-I


2/14

Cost- “ the amount ofexpenditure (actual or

notional) incurred on, orattributable to a speciedthing or acti!it"#-CIMA,

$ondonCosting-#the techni%ues andprocesses of ascertaining

#-

Meaning & enition


3/14

“Cost Accounting is theapplication of accounting and

costing principles, methodsand techni%ues in theascertainment of costs and

the anal"sis of sa!ings and'orexcesses as compared ith

pre!ious experience or ith#-

Cost Accounting


4/14

“ the application of costing andcost accounting principles, methodsand techni%ues to the science, art

and practice of cost control and theascertainment of protabilit" Itincludes presentation of information

for the purpose of managerialdecision-ma*ing#-CIMA, $ondon

Cost Accountanc"


5/14

Cost Ascertainment

Cost +!aluation

Cost Control

Cost eduction

rice .ixing

ata for ecision-ma*ing/ le!el of

output roduct 0mix, protabilit" ofproducts and processes, comparati!ecost schedules

1b2ecti!es of Cost Accounting

i i i f i i l


6/14

$imitations of .inancialAccounting

3istorical

4nclassied

5hole 1rganisation

6o Material Control6o 5age Control

6o 1!erheads

Control6o 6ormalc"

Approach

6o Cost +!aluation

rice .ixationdi7cult

6o Cost eduction

8enders &9uotations

ata for eporting

+limination of lossManipulation

6o Comparison


7/14

Financial

Accounting

+xternal eporting

Annual eporting

3istorical

1b2ecti!e Information

5holesome Approach

Compulsor"

igid reparation

Accurate

Independent

Audit

Internal eporting

eriodic eporting

3istorical'rospecti!e

:ub2ecti!e i!isional

;oluntar"

.lexibilit"

Approximation

dependant 6o Audit

i


8/14

+7cient Management ofesources

+limination of 5astagesCost Control.acilitating rice .ixation3elping ecision-ma*ingreparation of Budgets

rot lanning

Ad!antages of Cost Accounting


9/14

.air 5ages

ecognition of +7cienc"

Incenti!e :"stem of a"ment

Cordial elation

3igher :hare of rot

Ad!antages to 5or*ers


10/14

esol!ing 8ax isputesolic" .raminglanningrice Control

Measuring +7cienc"9uantum of :ubsid"

Ad!antages to the=o!ernment


11/14

5here the 1b2ecti!e is costascertainment/

rocess Costing/ 4nit Costing,1perating Costing, and 1perationCosting

>ob Costing/ >ob Costing, Batch Costingand Contract Costing

Methods of Costing


12/14

5here the ob2ecti!e iscost e!aluation/

:tandard Costing3istorical Costing

:"stems of Costing/


13/14

5here the ob2ecti!e is costcontrol and cost reduction/

Marginal costing

Absorption Costing

8echni%ues of Costing


14/14

83A6? @14

chapteri basicconcepts 100217174049 phpapp01

Documents