Presented by:- ABHISHEK DAVE (147110592001) AJAY BHOI (147110592002) Group No.:- 1

Submitted to:- Parul Institute of Management & Research

Difference among costing, cost accountancy and cost accounting.

A tool to determine the cost of products or services or operations

Every concern must design its own costing system, keeping in view its peculiar problems

Costing information should be collected as and when work proceeds

Costing

Job Order Costing – Applies where work is undertaken to customers special requirements.

Contract Costing or Terminal Costing: It is same as Job order costing; however, job is small and contract is big contract. Contract is of long duration and may continue for more than a financial year.

Batch costing: Cost of a batch or group of identical products is ascertained; each batch of products is a cost unit for which costs are ascertained.

Methods of costing - Types

Process Costing – Applies to a context where there is a continuous process. Costs are accumulated for each process. And then total cost of a process is divided by the number of units produced to arrive at cost per unit.

Operations Costing: Involves cost ascertainment for each operation.

Operating or services costing: It is applied to

services; cost units are passenger –kilometer, room per day, bed per day.

Methods of costing – Types…..

Standard costing – Standard cost is predetermined as target of performance and actual performance is measured against the standard.

Budgetary control: By comparing actual with planned / budgeted performance

Marginal costing: Only variable cost is allocated to individual cost centers or cost units

Total Absorption costing – Both fixed and variable costs are charged to products.

Techniques of costing – Types…..

Application of costing and cost accounting principles, methods and techniques to the science, art and practice of cost control and the ascertainment of information derived for managerial decision making (CIMA)

Cost Accountancy facilitates management with cost control initiatives, ascertainment of profitability and informed decision making.

Cost Accountancy

• CA is a formal system of accounting for costs in the books of accounts by means of which costs of products and services are ascertained and controlled.

• Cost means “the price paid for something”

• Cost ascertainment is computation of actual costs incurred

• Cost estimation is a process of predetermining costs of goods and service.

Cost Accounting

• Ascertainment of cost

• Control of cost

• Guide to business policy such as make or buy, introduction of new product etc

• Determination of selling price

Objectives of Cost Accounting

Price Fixation Control on unprofitable activities Managerial Decision, Policy Making Useful Information Cost Control Provides valuable data Effective check

Prof. Mital Thakkar 9

Advantages of Cost Accounting

Thank you