Cost Accounting - CostAccounting

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Cost Accounting is an expanded phase of financial accounting which provides  management Promptly with the cost of producing and/or selling each product and rendering a  particular service. Management Accounting Management accounting is application of professional knowledge and skill in the  preparation and Presentation of financial information in such a way as to assist management in decision  making and In the planning and control of operations of the entity Objectives Objective of  cost accounting  is computation of cost per unit, whereas the objective of  management Accounting  is to provide information to the management for decision making purposes. COST CLASSIFICATION Elements of cost (Direct Material, Direct Labor, Other Production costs) can be classified  as direct cost or indirect cost. Direct Cost A direct cost is a cost that can be traced in full to the product or service for which cost is  being determined. Costs that can be economically identified with a specific saleable product or service (cost  unit). a)  Direct material costs  are the costs of materials that are known to have been used in producing and selling a product or rendering a service. b)  Direct labor costs  are the specific costs of the workforce used to produce a product  or rendering a service. c)  Other direct production costs  are those expenses that have been incurred in full as a direct consequence of producing a product, or rendering a service. Indirect Cost/Overhead Cost An indirect cost or overhead cost is a cost that is incurred in the course of producing  product or rendering service, but which cannot be traced in the product or service in full. Expenditure incurred on labor, material or other services which cannot be economically 
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This note was uploaded on 05/15/2010 for the course ACCOUNTING B97702031 taught by Professor Lyz during the Spring '09 term at Punjab Engineering College.

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Cost Accounting - CostAccounting

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