Intro To Cost And Management Accounting

Question 1

Objective of cost accounting

Answer 1

1. Ascertainment of cost
2. Determination of selling price and profitability
3. Cost control
4. Cost reduction
5. Assisting management in decision making

Question 2

Scope of cost accounting

Answer 2

1. Cost
2. Cost accounting
3. Cost analysis
4. Cost comparison
5. Cost control
6. Cost reports
7. Statutory compliances

Question 3

Users

Answer 3

Internal

1. Managers
2. Operational level staffs
3. Employees

External

1. Regulatory authorities
2. Auditors
3. Shareholders
4. Creditors & lendors

Question 4

Essentials of good cost accounting system

Answer 4

1. Informative & simple
2. Accurate & authentic
3. Uniformity & consistency
4. Integrated & inclusive
5. Flexible & adaptive
6. Trust on the system

Question 5

Cost & management accounting basis

Answer 5

Nature
Objective
Area
Recording of data
Development
Rules & regulations

Question 6

Financial & cost accounting basis

Answer 6

Objective
Nature
Recording of data
Users of information
Analysis of cost & profit
Time period
Presentation of information

Question 7

Limitations

Answer 7

Expensive
Requirement of reconciliation
Duplication of work

Question 8

Classification of costs

Answer 8

By nature/ elements
By functions
By variability/ behavior
By controllability
By normality
By costs for marginal decision makjng

Question 9

Elements of cost

Answer 9

Material cost
Employee cost
Other expenses

Question 10

Functions of cost

Answer 10

Direct material cost
Direct employee cost
Direct expenses
Production / manufacturing OH
Administration OH
Selling OH
distribution OH
Research & development cost

Question 11

Methods of costing

Answer 11

Single / output costing
Batch costing
Job costing
Contract costing
Process costing
Operating costing
Multiple costing

Question 12

Techniques of costing

Answer 12

Uniform costing
Marginal costing
Standard costing & variance analysis
Historical costing
Absorption costing