The cost is identified as the total amount of money paid by the organization for the labor, equipments, services, raw material and other resources that are used in the process of manufacturing of products or rendering of services. The cost accounting is identified as the branch of accounting that helps in the detailed presentation of the cost information of the company. The various topic that are studied under the cost accounting are the real cost, accounting cost, direct and indirect cost, explicit and implicit cost, opportunity cost along with sunk cost, incremental cost and the economic cost. Thus, the cost accounting help aims to provide assistance to the students in all these topics.
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The cost accounting help aims to provide assistance and literary guidance with respect to the major topics of the subject. The major topic for which cost accounting help can provide benefits to the students are the proper determination of the cost of goods sold (COGS), along with classification of cost in different categories. The benefits of the cost accounting can also be explained with the knowledge and guidance received through the cost accounting help in a very simple and lucid manner. The help is beneficial for those students who are facing constant difficulties in understanding the key concept related to cost accounting.
Cost accounting help provide assistance with multiple cost accounting methods!
There are different cost accounting methods that are studied under cost accounting. This includes:
Unit costing method: The method is also identified as the single output costing method in which costing is done in respect of identical units or where products are produced under a continuous production activity. The cement production and mining industries are the one of the examples where this method is used.
Job costing method: Costs are determined in relation to a particular work order that has its unique scope and specification. This method is also used for tailor made products. The major area where this method is used is the repairing of the buildings along with painting work etc.
Batch costing: This cost accounting method is mainly utilized in industries wherein the production takes place in the form of batches that produce products of similar nature and design. The pharmaceuticals industry uses this cost accounting method for determination of cost.
Service or operating costing: This cost accounting method is mainly used for determining the cost of various types of operating services, for example, railways, public transportation service and hospitals.
Contract costing: In this cost accounting method, the costing is done for jobs that incur heavy expenditure and stretches for a significant period of time over different construction sites. The contract costing is generally used for determining the cost that is incurred during construction of buildings, bridges, dams and roads.
Cost accounting basics can be learnt with the Cost Accounting Help!
The cost accounting basics enables the cost accountants to review the cost accounting system that includes activities such as data collection, proper reporting and resolving of issues that are identified with cycle counting variances. Following are the basics of the cost accounting system:
Product cost: The information related to determination of variable cost of products can be obtained through the product costing system. This can be done with the help of bill of materials which can be obtained from the engineering department of the company.
Employee cost: This is cost that incurred by the company for a single employee. This helps in determination of various aspects related to employee benefits, compensation, travelling and entertainment cost of employees. The information can be used by the company for analyzing the level of cost efficiency within employees.
Customer costs: These are the variable costs of the goods that are combined with other costs that can be directly traced to the specific customers in order to know the profitability from each single customer. The positive result of this can be significant increase in the number of customers for whom the company aims to continue the business for a longer time.
Cost reduction analysis: This concept of cost accounting states that with a potential decrease in business, the management of the company finds option through which the unnecessary cost of the business can be reduced while retaining the overall basic functionality of the company. This allows the cost accountant to use his discretion regarding which costs can be eliminated without causing much loss to the business organization.
Cost Accounting Help is considered essential for understanding the cost accounting objectives!
The major cost accounting objectives can be recognized in the form of cost ascertainment, accurate selling price determination and proper presentation and recording of costs for attaining managerial efficiency. The cost accounting objectives also help in proper cost control and reduction, proper profit ascertainment for each specific activity along with computation of break-even point and adequate assistance in managerial decision making. The other objectives of cost accounting are as follows:
- To identify per unit cost of the various goods produced by a business organization
- To undertake proper disclosure of the sources that resulted in wastage of material, expense or time while using the machinery, tools and equipments along with preparation of suitable reports that enables the business organizations to control such unnecessary wastage.
- To identify the sources that can result in economy and savings through installation and implementation of cost control system for labor, material and overhead.
- To assist the management in preparation of suitable budgets and effective implementation of the budgetary control system.
- To undertake proper cost analysis in respect of both processes and operations through different cost elements.
- To provide useful data for price fixation of the goods produced and services rendered.
- To exercise effective control over stock of raw material, WIP, finished goods and consumables stores in order to achieve proper management of capital that has been locked up in these stocks.
Cost accounting and financial accounting is not one and the same thing!
There are certain differences between the cost and financial accounting which can be listed as follows:
Focus: The cost accounting reports provide details and information related to the particular product, customers, business subsidiaries and the product lines while the financial accounting reports provides information related to the financial position of the business on an overall business.
Users: The cost accounting reports are prepared for the internal stakeholders of the company while the financial accounting reports are the standard reports that are prepared by the company for the external stakeholders, for example, regulatory agencies, investors, credit rating agencies and the creditors.
Format: The cost accounting reports does not follow any specific format and the cost reports are prepared in the manner that is convenient for the management. On the other hand, the financial reports are prepared as per the statutory guidelines provided by the IFRS and the GAAP and thus, the content in the financial reports is highly specific to the company.
Frequency: The cost accounting reports can be prepared at any time during the month, quarter or years while the financial accounting reports are prepared are mandatory to be prepared at the end of the year.
The Cost Accounting Help can be the most effective option for the student who is studying the cost accounting subject.