ITFT- COST ACCOUNTING

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Information about ITFT- COST ACCOUNTING
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Published on April 26, 2014

Author: Neelu333

Source: slideshare.net

Description

COST CLASSIFICATION

Classification of Costs

LLearning Objectivesearning Objectives • Cost Methods & Cost Techniques • Costing Systems/Methods • Cost Classification • Cost Sheet

Cost Methods & Cost Techniques • Cost Methods • 1. Job Costing • 2. Contract • 3. Batch • 4.Process( continuous) • 5. Service( Operating) • Cost Techniques • 1. CVP Analysis • 2. Standard Costing • 3. Budgetary Control • 4. ABC • 5. Relevant Costing • 6. Target Costing

• Historical • Absorption • Direct • Marginal • Standard • Uniform Costing System Methods

COST CLASSIFICATION  Elements  Behavior  Functions  Normality  Control  Decision Making

A: Elements MATERIAL LABOUR EXPENSES The ProductThe Product Direct Materials Direct Materials Direct Labor Direct Labor Manufacturing Overhead Manufacturing Overhead

MATERIAL • Direct: traceable to one particular process, job or product – identified with each unit of product • Example: manufacturing an apparel • Cloth, collar, buttons, cufflinks, thread • Primary packing material (e.g., carton, wrapping, cardboard, boxes, etc.) • Fuel, lubricating oil etc for operating & maintenance of machine • Small tools • Materials used for repairs & maintenance

LABOUR • Inspectors • Supervisors • Internal transport staff • Storekeeper, maintenance staff

EXPENSES • Expenses leading to a job or contract • Traveling expenses for negotiation • Special pattern, design • Special tools for executing the contract • Rent • Insurance • Canteen, hospital, power , lighting, maintenance

B: Behaviour Fixed in short run & long run Variable Varies with volume and constant per unit Semi-variable A cost could be variable for one level of activity whereas it could be fixed for another. Not inherently fixed or variable Many costs are semi-variable in nature

C: Functions • Production Cost • Administration Cost • Selling Cost • Distribution Cost

D: Normality • Normal • Abnormal

E: Control • Controllable • Uncontrollable

F: Decision Making • Marginal vs. Absorption Costing (with fixed cost and without FC) • Sunk - irrelevant • Committed – pre committed • Opportunity • Incremental / Differential • Avoidable & Unavoidable • controllable / uncontrollable

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