Classification of Cost
Cost may be classified into different categories depending upon the purpose of classification.
Some of the important categories in which the costs are classified are as follows:
1. Classification of cost methods on the basis of nat
Cost accounting is the accounting of the cost. It is made of two words- Cost and Accounting.
The term cost denotes the total of all expenditures involved in the process of production.
Thus, it covers the costs involved in the production an
1) Prepare a cost sheet from the following data to find out profit.
Amt. In Rs
a) Opening Stock of R.M 5000
b) Opening Stock of F.G 4000
c) Closing Stock of R.M 4000
d) Closing Stock of F.G 5000
e) Raw materials purchased 50000
f) Wages paid to labourers
A cost sheet is a report on which is accumulated all of the costs associated with a product or
production job. A cost sheet is used to compile the margin earned on a product or job, and can form
the basis for the setting of prices on similar pr
Material costing is the process of determining the costs at which inventory items are recorded into
stock, as well as their subsequent valuation in the accounting records.
1. Classification of Material
In the first step of purchasing proc
The work of purchasing materials should be handled, if the size of the concern permits, by a separate
Purchasing Department, under an official designated as Purchase Manager. In order to ensure
procurement of materials of requisite quantity at economic pr
Store / Inventory control technique is the important tool in the hands of the modern management. It
is indispensable for each and every manufacturing concern. The following are the important
techniques of store control.
Fixation of various stock level: Un
In cost accounting, material is defined as the part of inventory. Basically, material and raw material
are used for same purpose. This is main part of total cost of production. It can reduce or increase
according to the fluctuation in production. So, this