This document provides an introduction to cost accounting. It defines cost accounting as classifying, recording, and allocating expenditures to determine the costs of products or services. The purpose is to provide management with suitably arranged cost data for control and decision making. Cost accounting deals with ascertaining the cost of orders, jobs, processes, services, or units. Its primary objective is cost ascertainment and its use in performance evaluation and decision making. The document outlines the scope of cost accounting and defines elements of cost such as material, labor, expenses, and overheads.

1. ACCOUTING FOR MANAGERS SUBMITTED BY:- “ASHU MITTAL” SUBMITTED TO:- “SHEFALI MAM”

2. INTRODUCTION TO COST ACCOUNTING COST ACCOUNTING IS A BRANCH OF ACCOUNTING AND HAS BEEN DEVELOPED DUE TO LIMITATIONS OF FINANCIAL ACCOUNTING, FINANCIAL ACCOUNTING IS PRIMARILY CONCERNED WITH RECORD KEEPING DIRECTED TOWARDS THE PREPARATION OF PROFIT AND LOSS ACCOUNT AND BALANCE SHEET. IT PROVIDES INFORMATION REAGARDING

3. CONTINUE…… THE PROFIT AND LOSS THAT THE BUSINESS ENTERPRISE IS MAKING AND ALSO ITS FINANCIAL POSITION ON A PARTICULAR DATE. THE INFORMATION CONCERNING THE BUSINESS ENTERPRISE IS HELPFUL TO MANAGEMENT TO CONTROL IN A GENERAL WAY THE MAJOR FUNCTIONS OF A BUSINESS VIZ, FINANCE,ADMINISTRATION, PRODUCTION AND DISTRIBUTION BUT DETAILS REGARDING OPERATING EFFICIENCY OF THESE DIVISONS ARE LACKING.

4. MEANING OF COST ACCOUNTING COST ACCOUNTING IS THE CLASSIFYING, RECORDING AND APPROPRIATE ALLOCATION OF PURPOSES OF EXPENDITURE FOR THE DETERMINATION OF THE COSTS OF PRODUCTS OR SERVICES AND FOR THE PRESENTATION OF SUITABLY ARRANGED DATA FOR PURPOSE OF CONTROL AND GUIDANCE OF MANAGEMENT. IT INCLUDES THE ASSCERTAINMENT OF THE COST OF EVERY ORDER,JOB, CONTRACT, PROCESS SERVICE OR UNIT AS MAY BE APPROPRIATE.

5. CONTINUE…… IT DEALS WITH THE COST OF PRODUCTION SELLING AND DISTRIBUTION. IT IS THUS THE PROVISION OF SUCH ANALYSIS AND CLASSIFICATIN OF EXPENDITURE AS WILL ENABLE THE TOTAL COST OF ANY PARTICULAR UNIT OF PRODUCTION OR SERVICE TO BE ASCERTAINED WITH REASONABLE DEGREE OF ACCURACY AND AT THE SAME TIME TO DISCLOSE EXACTLY HOW SUCH TOTAL COST IS CONTROL AND REDUCE ITS COST THE PRIMARY OBJECTIVE OF COST ACCOUNTING IS ASCERTAINMENT OF COST AND ITS USE IN PERFORMANCE EVALUATION AND DECISION MAKING.

7. IT RECORDS INCOME AND EXPENDITURE RELATING TO PRODUCTION OF GOODS AND SERVICES.

8. IT PROVIDES STATISTICAL DATA ON THE BASIS OF WHICH FUTURE ESTIMATES ARE PREPARED AND QUOTATIONS ARE SUBMITTED.

10. CONTINUE…… 2) COST ACCOUNTIDNG:- IT IS THE PROCESS OF ACCOUNTING FOR COST WHICH BEGINS WITH RECORDING OF EXPENDITURE ANDE ENDS WITH THE PREPATATION OF STATISTICAL DATA, IT IS FORMAL MEDHANISM BY MEANS OF WHICH COSTS OF PRODUCTS OR SERVICES ARE ASCERTAINED AND CONTROLLED .

11. CONTINUE…… 3) COST CONTROL:- COST CONTROL IS THE GUIDANDCE AND REGVEULATION BY EXECUTIVE ACTION OF THE COSTS OR OPERATING AN UNDERTAKING IT AIMS AT GUIDING THE ACTUAL TOWARDS THE LINE OF TARGETS REGULATES THE ACTUALS IF THEY DEVIATE OR VARY FROM THE TARGETS

12. CONTINUE…… 4) INTER-FIRM COMPARISON:- COST ACCOUNTING HELPS IN MAKING COMPARISIONS OF COST OR OF PROFITS OF ONE FIRM OPERATING IN THE SAME INDUSTRY. 5) CONTROL ON WASTAGE:- COST ACCOUNTING CAN EXPLAIN THE SOURCE OF WASTAGE IN THE ELEMENTS OF COST & THUS CAN SAVE THE NATIONAL FACTORS OF PRODUCTION.

13. ELEMENTS OF COST THE TERM “COST” MAY BE USED IN DIFFERENT SCENCES. COST IS TO BE STUDIED IN RELATION TO THE PURPOSE AND CONDITION.COST DEPENDS BASICALLY ON: THE NATURE OF THE BUSINESS. THE CONTEXT IN WHICH IT IS USED. I.C.M.A. DEFIES COST AS, “COST IS THE AMOUNT OF EXPENDITURE INCURRED OR ATTRIBUTABLE TO A GIVEN THING.”

16. MATERIAL COST I.C.M.A. “THE MATERIAL COST IS THE COST OF COMMODITIES SUPPLIED TO AN UNDERTAKING.” THE MATERIAL CAN BE IN RAW SHAPE OR IN MANUFACTURED STATE. AS FOR EXAMPLE, COTTON IS A RAW MATERIAL FOR YARN FACTORY, WHILE CLOTH IS A RAW MATERIAL FOR READY-MADE GARMENT FACTORY.

17. LABOUR COST THE TERM LABOUR MAY BE DEFINED AS THE HUMAN EFFORT BY WHICH MATERIALS ARE CONVERTED INTO FINISHED PRODUCTS. I.C.M.A. DEFINES LABOUR COST AS, “THE COST OF REMUNERATION (WAGES, SALARIES, BONUS, COMMISION, ETC.) OF THE EMPLOYEES OF AN ORGANISATION.”

18. OTHER EXPENSES THE EXPENSES ARE INCURRED FOR PRODUCING A PRODUCT OR PROVIDING A SERVICE IN ADDITION TO MATERIAL & WAGES AS RENT OF FACTORY, INSURANCE, DEPRECIATION, TELEPHONE BILL, ETC. I.C.M.A. DEFINES EXPENSES AS, “THE COST OF SERVICES PROVIDED TO AN UNDERTAKING AND THE NOTIONAL COST OF THE USE OF OWNER’S ASSETS.”

19. OVERHEADS OVERHEADS CAN BE AGGREGATE OF INDIRECT MATERIAL,INDIRECT LABOUR & INDIRECT EXPENSES. OVERHEADS MAY ALSO BE KNOWN AS ‘ON COST’ OR ‘BURDEN’. I.C.M.A. DEFINES OVERHEADS AS “THE AGGREGATE OF INDIRECT MATERIAL COST, INDIRECT LABOUR COST AND INDIRECT EXPENSES.”

20. BIBLOGRAPHY BOOKS:- ACCOUNTING FOR MANAGERS PAGE NO.:- 460-486