Intro To Cost Accounting Flashcards
What is cost accounting?
Refers to the process of collecting, summarizing, analyzing and reporting in monetary terms, cost information by the management to help carry out its function of planning, organizing, coordinating, controlling and dec-making
Purposes of Cost Accounting
1) Cost ascertainment of job, product or process
2) cost ascertainment of stock to be carried to the financial statement
3) to check the accuracy of the profit gotten financial statement
4) Helps in setting prices
5)helps in setting standards for control purposes
Who are the users of cost accounting information?
The internal decision makers I.e management
Who are the users of financial accounting information?
Internal and external decision makers
Primary purpose of financial accounts?
To render accounts for stewardship
Primary Purpose of CA
To help the mgt in decision making
What is the unwritten rule of CA information ?
That the information must be useful and timely to aid decision making
Primary emphasis of cost accounting?
Segment reporting
What is segment reporting?
Reporting of information (in monetary terms) of different segments of an organization or for a job
When is Cost accounting information prepared?
On-demand of the mgt
What are Costing Methods?
Used for determining the cost of a job, product or process
What are costing techniques?
Used for determining the value of finished goods
_____ are the tools and ______ are the ways / approaches to ascertain the cost of a job, product or process?
Techniques and Methods
What is process costing?
Method used in determining cost of standardized/ homogeneous products involving a series of processes
What is job costing?
Method used for non-homogeneous/standardized products made based on customer requirements
Job/_______ costing?
Contract costing
What method is used when:
A standardized product is made based on customer requirements
When the duration for the job is long
Contract Costing
When the duration of completing the job is small, what costing method is to be used?
Contract costing
What is batch costing?
Costing method used for homogeneous products made in batches
Standard costing facilitates which management function and how?
Controlling by setting standard performance and providing feedback for control purposes
______ is the estimated input cost for producing a given output?
Standard cost
Cost Variance =?
Standard Cost - Actual Cost
________is a costing technique where only the variable costs of producing a product is considered in ascertaining the cost
Marginal costing
Marginal costing is also known as?
Direct or Variable Costing
