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.

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 />