Cost-accountancy course - Costing for Managers CHAPTER-I...

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Unformatted text preview: ___________________________________________________________________________________________________________ Costing for Managers ___________________________________________________________________________________________________________ CHAPTER-I BASIC CONCEPT OF COST ACCOUNTANCY 1. DEFINITION: Cost Accountancy Applications of Costing and Cost Accounting principles, methods and technique to the art, science and practice of cost control and ascertainment of profitability. It includes presentation of information derived there-from for the purpose of managerial decision-making’. 1.1 PRINCIPLES • Maintaining Professional Competency, Integrity, Confidentiality and Objectivity • Continuous development of knowledge & skill. • Refrain from disclosing or misusing confidential information. • Refrain from engaging in or supporting any activity that would discredit the profession. • Communicate information fairly and objectively. 1.2 OBJECTIVE • Application of right Methods or ways of correct cost findings at variant situations, • Application of suitable Techniques of cost control and assessing operational profitability. • Development of Art of presentation for quick and easy interpretation of performance. • Enhancing Professional expertise to the best use of Management. 1.3 METHODS Costing has been stated as method of classifying, recording and charging of cost to the products and services through appropriate and logical process or system depending on the nature of industry, Costing methods have been broadly divided into the following categories, viz. ___________________________________________________________________________________________________________ RTC KOLKATA 23.00 1 ___________________________________________________________________________________________________________ Costing for Managers ___________________________________________________________________________________________________________ 1.3.1 JOB COSTING for jobbing industries engaged in production on specific order of customer and 1.3.2 PROCESS COSTING for process industries engaged in production of repetitive nature of products in a continuous process. 1.3.3 Variants of those broad methods of costing. i) Contract or Terminal Costing: This is a variant of JOB Costing. This method is followed in huge single contract like, Building, Bridge, and Road etc. Separate accounts are being opened for different contracts. ii) Batch Costing: This is an extension of Job costing. When a number of units of homogeneous type are produced in a batch, the said batch is being treated as a job. Cost arrived at for the batch as a whole in the card is divided by the number of units in that in order to arrive at the average cost per unit in that batch. Such method is followed in Cycle Industry....
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This note was uploaded on 11/23/2010 for the course BUSINESS AC20123 taught by Professor Alan during the Spring '10 term at Columbia Southern University, Orange Beach.

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Cost-accountancy course - Costing for Managers CHAPTER-I...

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