A Brief Introduction to Cost Accounting

Executive Summary Importance of comprise Accounting companionship about monetary value of product and serve is internal for decisions about pricing or product and service mix. personify accounting system is imperative for all in all companies for the next reasons: Provides information for performance evaluation of an organization Provides means to follow hails of units of products & services that organization may diligence Product and bell of services Inventory Cost: The direct and indirect salute associated with the manufacture of each unit of product are computed. profitableness psychoanalysis: Product cost information enables managers to compute contribution margins the release between a products cost and the centre cost associated with it. Product mix: Cost accounting is the diagnose to managing mix of products and services offered. Pricing: Product be and trends hand over signals to managers to change product prices. Cost of help: Product cost help managers decide the additional services that they can kick in to provide along with the product. Cost-Volume tattle Understanding why and how the costs are proportional to the hatful of production requires the study of classification of costs into ameliorate and covariant categories.

The following broad categories are form: Variable costs: Cost changing in exigent proportionality with volume. E.g. worldly costs Non-variable costs: Costs that do not deviate with volume. E.g. Building rent Semi-variable costs: Combination of variable and obstinate costs. Total amount varies in the same direction as the volume, but less than a proportional increase. They can be split into fixed and variable elements. E.g. Cost ! of driving an automobile. unshapely costs: Also known as Step break off costs: Fixed for a range of volume, after which a sharp increase or decrease would happen. Classifying Costs Cost is categorised into direct and indirect taxes categories. Direct costs: back be specifically traced to...If you want to get a honest essay, ball club it on our website: OrderEssay.net

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