cost accounting for beginners

1.  Cost Accounting is the form of managerial accounting that aims
to capture a company’s total cost of production by assessing
variable and fixed cost of production.
 STEPS :
 Recording the Cost Data
 Classification of Cost
 DetermineTotal Cost
 Finding Unit Cost
 Obtaining Selling Price
 Cost Control and Decision Making

2.  Evaluating Performance of a Manager
 Evaluation and Management of Cost
 Designing Cost Management System
 Generation of Creative Ideas

3. • Helps to identify and evaluate deviations
• Efficiency and effectiveness can be evaluated
• Either periodic or systematic reporting
• Cost centers and responsibility centers

4. • Inventory cost
• Profitability analysis
• Product mix
• Pricing
• Cost of service

5. • Cost behavior is a prerequisite for understanding, using, or designing cost accounting or cost
management systems.
• The level of cost can be a function of either or both the volume of activity or time when the cost is
incurred.
• The prices of material, labor, and other resources change as time passes, and because time allows
changes in manufacturing methods or service delivery, comparing costs at two points in time can be
informative about efficiency.
• However, understanding the effect of changes in volume on costs is essential to measuring, analyzing,
and using information about costs for both performance measurement and product costing.

6. • Variable costs
• Non variable costs
• Semi variable costs
• Chunky costs

7. ClassifyingCosts:-
• Direct costs
• Indirect costs

8. Direct cost can be specifically traced
•Material
•Labour
•Overhead

9. Cost which cannot be specifically traced directly to single product , project , organization unit or
activity
•Cost are assigned to cost centre or cost pool
•Cost are assigned to each pool to product using cost driver