There is no system or method of costing which can fulfill the requirements of all types of Industries. To install the most suitable system of costing in a particular organisation, the following should be noted: 1. Essentials Requisites of a Good Costing System. 2. Steps necessary to install the system. 3. Problems or practical difficulties in installing a costing system. [...]
The following points highlight the top six types of costing systems. The types are: 1. Historical Costing 2. Absorption Costing 3. Direct Costing 4. Marginal Costing 5. Standard Costing 6. Uniform Costing. Type # 1. Historical Costing: In this type of costing system, the costs are ascertained only after they have been incurred. The main objective of it is to [...]
This article throws light upon the seven main steps for installations of a costing system. The steps are: 1. Objectives to be Achieved 2. Study the Product 3. Study the Organisation 4. Deciding the Structure of Cost Accounts 5. Selecting the Cost Rates 6. Introduction of the System 7. A Follow-up. Installation of a Costing System: Step # 1. Objectives [...]