This document discusses different concepts of cost accounting including costs related to income measurement, profit planning, control, and decision making. It defines key costing terms like product costs, period costs, fixed costs, variable costs, relevant and irrelevant costs, incremental and differential costs, opportunity costs, and imputed costs. The overall purpose is to explain how costs are classified and used for different accounting and business objectives.

1. Concept Of Cost Accounting By Arbaaz khan

3. It is the amount denoted on invoices as the price and recorded in bookkeeping records as an expense or asset cost basis.

5. Cost Related To Income Measurement

7. Examples: Raw material & Direct labor.

8. Period Cost: those costs which are matched against the revenue of the current period, that is the sum of period costs is deducted as expenses from the revenue of current period only.

9. Expired Cost: these are the cost s which cannot contribute to the production of future revenues.

10. Unexpired Cost: these are the cost which have the capacity of contributing to the production of revenue in the future

13. Example: Rent of a factory, office premises, property insurance.

14. Variable costs: costs that tend to vary in total in direct proportion or in a one-to-one relationship to changes in production activity, sales activity or some other measure of volume are referred to as variable costs within relevant range for given budgeted period

16. Examples: power, repairs & maintenance

17. Future Costs: Costswhich are reasonably expected to be incurred at some future date as a result of a current decision are called future costs.

20. Direct & Indirect Costs: those costs which can be identified logically and practically in their entirety to a particular department or a product are called direct costs.Those costs which are not particularly identifiable exclusively and wholly to a particular product, division or segment are called indirect costs or common costs.

23. Long range (capacity decisions) which cover a long time span and take into account the time value of money.

25. Example: cost of material and direct labor (variable cost) and fixed costs (for creating new facilities)

26. Cost which is not affected by a decision is irrelevant cost.

28. Example: difference in cost between buying and making of a component.

29. Opportunity & Imputed Costs: opportunity costs represent the benefits foregone by not choosing the second best alternative in favour of the best one.

30. Imputed costs are similar to the opportunity costs in that they are not recorded in the accounting books however they are hypothetical costs that must be taken into account if a correct decision is to be arrived at.