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Cost accounting is concerned with recording, classifying, and summarizing costs to determine the costs of products or services, plan and control costs, and provide information to management for decision making. It differs from financial accounting in that cost accounting is used internally by companies for managerial decision making, while financial accounting provides information on the overall financial position of the company. Cost accounting classifies costs as fixed or variable and is used to calculate the cost of individual products, jobs, or processes. The document then provides an example of the operating costs of running an administration at a business school, classifying costs as variable, fixed, or maintenance costs and calculating the total daily operating cost. It also lists the estimated total assets of the business school.
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![What is cost?<br />Cost means the amount of expenditure (actual or notional) incurred on, or attributable to, a given thing<br />What is cost accounting?<br />Cost accounting is concerned with recording, classifying and summarizing costs for determination of costs of products or services, planning, controlling and reducing such costs and furnishing of information to management for decision making.<br />A/c to CIMA<br />The application of costing and cost accounting principles, methods and techniques to the art science and practice of cost control and ascertainment of profitability.<br />Why cost accounting?<br />To calculate cost of each product. Job, process.<br />Data to calculate SP <br />Data to send quotations<br />Comparative cost statement<br />Analysis and classification of various operations<br />To disclose wastage and inefficiencies<br />Relative study of various operations<br />Inventory of stores <br />HOW COST ACCOUNTING IS DIFFER FROM FINANCIAL ACCOUNTING?<br />,[object Object],Cost accounting helps in finding out cost of a product and control of cost. Where as financial accounting helps in knowing the financial position of the business i.e. is profit or loss in a financial year.<br />The Difference between financial and cost is that in financial accounting all business transaction between debtor and creditor are determined. Cost accounting is used for managerial decision making, how much cost is spent in all production as well as admin department. What amount of budget is required in future and all receipt forecasting.<br />Financial accounting covers accounts of the whole business <br />Relating to all the commercial transactions. Cost accounting directs its attention only to the transactions vices concerning, manufacturing and sale of Products and services.<br />COST OF RUNING OF ADMINISTRATION AT J K BUSINESS SCHOOL<br />OPERATING COSTING<br />It applies where standardized services are provided by an undertaking or by a service cost centre within an undertaking.<br />CIMA Defines the method Operating costing applies where standardized services are provided by an undertaking.<br />Operating costing is used by concern running diverse nature of activities, the cost system is obviously different from that for manufacturing concerns. <br />,[object Object]](https://image.slidesharecdn.com/cma-110405142354-phpapp01/85/Cma-1-320.jpg)
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ARKA RAJ SAHA 27332020003.....pdf
This document provides an overview of economics concepts for engineers, including:
1. Economic decision making involves factors like price, availability, and quality of raw materials. Life cycle costing adds up all costs of an asset over its lifetime.
2. Fixed costs do not change with production levels, like rent or insurance. Variable costs change based on production, like materials.
3. Opportunity cost is the potential benefit missed from choosing one alternative over another. It represents the return that could have been earned by taking the next best alternative.
4. Life cycle costing adds up all costs associated with an asset from purchase to disposal, excluding salvage value. It provides a more accurate total cost estimate than initial
Financial Management.pptx
Financial management involves planning, directing, monitoring, and organizing the monetary resources of an organization. It helps managers understand profitability ratios like profit/volume ratios and return on assets.
An operating budget is a detailed projection of estimated income and expenses over a given period, usually one year. Preparing an operating budget involves forecasting materials, labor, staffing, expenses, and revenues to calculate the total budgeted expenditure and projected profit. The budget helps monitor and control activities but may not be 100% accurate.
Depreciation is the gradual conversion of a capital asset's cost into an expense over its useful life. Straight-line and reducing balance are methods to calculate depreciation annually. Financial concepts like future value,
BBA - Unit 1 - Basic Concept in Cost.pptx
Cost accounting involves recording, analyzing, and reporting costs of products to help management with decision making. It determines fixed and variable elements of costs. Cost accounting facilitates cost control, profitability analysis, and price determination. It differs from financial accounting in its focus on internal reporting, use of pre-determined costs, and frequent reporting to management for purposes like cost reduction.
Cost Accounting presentation
This document provides an overview of cost accounting. It begins with definitions of cost and cost accounting, noting that cost accounting is concerned with recording, classifying, summarizing, and analyzing costs to determine the costs of products or services and provide information to management for decision making. The document then discusses objectives of cost accounting like cost ascertainment and control, methods like job and process costing, techniques including standard and absorption costing, classifications of costs by nature, function, variability, and controllability, and purposes of cost accounting like price determination and profitability analysis. It provides examples throughout and concludes by listing references used.
MICROECONOMICS-PPT examples.pptx
The document discusses key concepts related to production, inputs, outputs, costs, and profit maximization. It defines production as using inputs to create outputs for consumption. Inputs are the resources that go into production like labor and materials. Outputs are the finished items produced. It also discusses the differences between labor intensive versus capital intensive production, short run versus long run time periods, production functions, and the concepts of total, average, and marginal products and costs. Profit maximization refers to a tendency of businesses to maximize profits by equalizing marginal costs and revenues.
Sme consulting - Financial Planning
Financial planning helps you determine your short and long-term financial goals and create a balanced plan to meet those goals.
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This document discusses leverage and capital structure. It begins by defining leverage as the use of fixed costs to magnify returns, and discusses how leverage increases risk and return. The document then outlines 6 learning goals covering topics like breakeven analysis, the different types of leverage (operating, financial, total), and theories of capital structure. It provides examples and formulas to demonstrate concepts like calculating breakeven points and measuring the degrees of different types of leverage.
409881206-Full-project-komul-1-docx.pdf
This document provides an introduction to finance and cost accounting. It discusses key concepts in finance such as studying monetary assets and managing project risks. It then defines cost accounting and explains how it is used to examine finances and improve profitability. The document outlines various cost accounting techniques like cost ascertainment and cost control that are used to calculate, analyze, and reduce costs. It also discusses the advantages of cost accounting in providing cost data for pricing, controlling materials, and evaluating profitable activities.
Risk Analysis and Project Evaluation/Abshor.Marantika/Gita Mutiara Ovelia/3-3
1. Risk analysis is important for project evaluation because project cash flows are risky and may differ from estimates, and forecasts are made by humans who can be optimistic.
2. Sensitivity analysis evaluates the effect of each value driver on NPV and identifies the most impactful variable. Scenario analysis considers simultaneous changes to multiple drivers. Simulation generates thousands of value combinations to model outcomes.
3. Break-even analyses determine the sales or output level needed to cover costs, including accounting, cash, and NPV break-even points.
Introduction to cost accounting
This document defines key concepts in cost accounting including cost, costing, cost accounting, cost estimation, cost ascertainment, cost allocation, cost apportionment, cost control, cost reduction, absorption costing and others. It explains the objectives and functions of cost accounting as well as the significance and limitations. Components of cost are defined including direct materials, direct labor, factory overheads, administrative overheads and selling overheads. The differences between cost unit and cost center as well as cost estimation and cost ascertainment are also summarized.
Eng econ lecture
This document provides an overview of engineering economics and its application in process engineering. It discusses key concepts like the time value of money, methods for quantifying project profitability like net present value, payback period, return on investment, and internal rate of return. It also covers typical accounting tools used like income statements and cash flow statements. The document explains how to estimate capital costs using methods like the turnover ratio and Lang's factor as well as operating costs considering factors like labor, materials, and utilities. It emphasizes the need to balance accuracy and cost when developing cost estimates.
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Cma
- 2. Fixed or Standing Charges. (Depreciation, insurance, taxes etc…)
- 3. Maintenance Charges: (repairs, tyros, tubes, spares, maintenance, etc…
- 4. Running or Operating Charges. (Petrol, diesel, lubricating oil, etc….) DEFINITION OF VARIABLE COST<br />Variable costs are the total expense changes as volume changes. Room supplies are a common variable cost. The supplies are directly related to the number of rooms that are filled.<br />Variable charges – (power, repairs and maintenance) etc...<br />DEFINITION OF FIXED COST<br />Costs are identified as fixed if they do not change as volume changes. For instance, a late night registration desk would be attended by one person, whether there was one guest or one hundred.<br />Fixed charges or standing charges (salary, rent, insurance) etc... <br />MAINTENANCE CHARGES<br />Maintenance Charges: These are cost of semi-variable nature and include expenditure on repairs, maintenance, tyres, tubes, accessories and spares. <br />VARIABLE COST OF JK BUSINESS SCHOOL<br />Particulars Monthly ExpensesTotal Rs.in lackTotal yearly Electricity & Diesel 6L 72 Hostel Fooding etc.4L 48 Marketing Expanses 15L 180 Placement Expenses 5L 60 Telephone Communication0.5L 6 Scholopership1 L 12 Administrative Expenses 1 L 12 Seminar & Conference0.5L 6 Faculty Development 0.5L 6 Library Updation1L 12 Examination fee/AICTE/ etc1.5L 18 Stationary Charges0.5L 6 misc. Expenses 1L 12 TOTAL EXPENCES(A)38L 456L Per day variable exp. 456L/365 1.249315 <br />FIXED COST OF J K BUSINESS SCHOOL<br />Particulars No. of employ Monthly salary each Monthly Total Total yearly Director1 2L 2L 24L FACULTYDEC4 0.8L 3.2L 38.4University18 0.9L 16.2L 194.4AICTE16 1L 16L 192<br />Registrar1L 0.5L 0.5L 6L Examination Head1L 0.5L 0.5L 6L <br />Marketing Department30.41.214.4Acount Department20.20.44.8Placement Department30.30.910.8Admin Dpartment30.20.67.2Hostel warden BOYS10.40.44.8Hostel Warden GIRLS10.40.44.8<br />Office BOYS/Peons80.060.485.76Drivers30.080.242.88Securty Guard100.080.89.6House keeping Staff100.060.67.2TOTAL Salary(B)8910.9847.52570.24Per day fixed expense 570.24/365 1.56230137 <br />NOW THE TOTAL OPERATING COST<br />Operating cost = Variable cost+ Fixed cost<br /> = 456 + 570.24 <br /> = 1026.24 Lack annually<br />Per day cost is<br /> =1026.24/365<br /> =2.811616438 Lack per day<br /> 2 lack 81 thousand 1hundred 61 rupees. Per day<br />TOTAL ASSET OF JK BUSINESS SCHOOL<br />Land (10 acre) rate 1 crore acre = 10 crores (estimated)<br />Appreciation 15% on land<br />10 core*15% = 1.5 core (increase every year )<br />Building cost (estimated) 5 cores<br />Estimated life of building 50 years<br />Depreciation 10% on building<br />=50000000*10/50*100 = 100000<br />Boys Hostel 2.5 core (estimated)<br />Girls Hostel 2.5 core (estimated)<br />Life of both building is 50 years estimated<br />10% depreciation on both buildings<br />= (2.5 +2.5)*10/50*100 = 1 lakh decrease every year <br />