2035 costing costing is the technique and process of

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products or services are ascertained and controlled. 20.3.5 COSTING Costing is “the technique and process of ascertaining costs.” Cost accounting is different from costing in the sense that the former provides only the basis and information for ascertainment of cost. Once the information is made available the costing can be carried out arithmetically by means of memorandum statements or by method of integral accounting. However, the two terms costing and cost accounting are often used interchangeably. No such distinction has also been observed for the purpose of this book. Wheldon has given an exhaustive definition of costing after expanding the ideas contained in the definitions of the terms ‘costing and cost accounting’. According to him costing is, “the classifying recording and appropriate allocation of expenditure for the determination of the costs of products or services; the relation of these costs to sales values; and the ascertainment of profitability”. 20.3.6 COST CONTROL According to the Institute of Cost and Works Accountants of India, cost control means “The act of power of controlling or regulatin g or dominating or commanding
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256 costs through the application of management tools and techniques to the performance of any operation to most predetermined objectives of quality, quantity, value and time oat an optimum outlay”. 20.3.7 OBJECTIVES OF COST ACCOUNTING The main objectives of cost accounting can be summarized as follows:- 1. Ascertaining Costs: - The first and foremost objective of cost accounting is to find out cost of a product, process or service. The other objectives which have been mentioned hereafter scan be achieved only when the costs have been ascertained. 2. Determining Selling Price : - Business enterprises are run on a profit making basis. It is thus necessary that the revenue should be greater than the costs incurred in producing goods and services from which the revenue is to be derived. Cost accounting provides information regarding the cost to make and sell such products or services. 3. Measuring and Increasing Efficiency : - Cost accounting involvers a study of the various operations used in manufacturing a product or providing a services. The study facilitates measuring of the efficiency of the organisation as a whole as well as of the departments besides devising means of increasing the efficiency. 4. Cost Control and Cost Reduction : - Cost accounting assists in cost control it uses techniques such as budgetary control, standard costing etc. for controlling costs. Budgets are prepared will in advance. The standards for each item of cost are determined, the actual costs are compared with the standard costs and variances are found out as to their causes. This greatly increases the operating efficiency of the enterprise. Besides it, cost is required to be reduced also constant research and development activities help in reduction of costs without compromising with the quality of goods or services.
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