Tag Archives | Cost Accounting

Depreciation: Concept, Definition and Causes

After reading this article you will learn about:- 1. Concept of Depreciation 2. Definition of Depreciation 3. Characteristics 4. Causes 5. Need 6. Basic. Contents: Concept of Depreciation Definition of Depreciation Characteristics of Depreciation Causes of Depreciation Need For Providing Depreciation Basic Factors in Estimating Depreciation 1. Concept of Depreciation: One of the basic objectives […]

Cost Sheet: Meaning, Advantages and Preparation

After reading this article you will learn about:- 1. Meaning of Cost Sheet 2. Advantages of Cost Sheet 3. Items Required for Preparation. Meaning of Cost Sheet: Cost sheet is a document which provides for the assembly of the estimated detailed cost in respect of a cost centre or a cost unit. It is a […]

Top 7 Advantages of Classifying Cost

This article throws light upon the top seven advantages of classifying cost into fixed and variable cost. The advantages are: 1. Profit Planning 2. Effective Cost Control 3. Fixation of Selling Prices 4. Marginal Costing and Break-Even Analysis 5. Budgetary Control 6. Proper Absorption of Overheads 7. Helpful in Decision-Making. Profit Planning: The Primary objective […]

Strategic Cost Management: Top 12 Techniques

The following points highlight the top twelve techniques involved in strategic cost management. The techniques are: 1. Activity Based Costing (ABC) 2. Target Costing (TC) 3. Total Quality Management (TQM) 4. Benchmarking 5. Business Process Reengineering (BPR) 6. JIT Inventory Control System 7. Balanced Score Card 8. Kaizan Costing 9. Six Sigma 10. Life Cycle […]

Inclusion of Overheads in Valuation of Stock | Cost Accounting

In this article we will discuss about the arguments for and against inclusion of overheads in valuation of stock. Arguments for Inclusion: 1. Fixed overheads should form a part, of the cost of production as these are incurred during a period in order to manufacture products of that period. 2. Where the fixed costs are […]

Problems of Cost System in Indian Companies

The following points highlight the seven major problems of cost system in Indian companies. The problems are: 1. Inadequate Capturing of Direct Material Costs 2. Excessive Emphasis on Labour Costs 3. Functional Classification of Overhead Costs 4. Simplistic Allocation Bases 5. Inadequate Attention to Service Departments and Service Organizations and Others. Problems of Cost System: […]

Measures to Obviate Idle Capacity in a Factory | Cost Accounting

In this article we will discuss about the measures to obviate idle capacity in a factory. Actions taken to Obviate the Idle Capacity: The action to be taken by the management to obviate the idle capacity depends on the causes leading to it. Some causes such as lack of materials, tools or equipment’s, breakdown of […]

5 Main Applications of Strategic Cost Management

The following points highlight the five main applications of strategic cost management. The applications are: 1. Product Costing 2. Make or Buy Decisions 3. Marketing Channel Decisions 4. Product Design 5. Activity Analysis. Strategic Cost Management: Application # 1. Product Costing: In many companies, product cost information available is deficient. It is important to capture […]

Target Costing: Definition, Objectives and Advantages

In this article we will discuss about Target Costing:- 1. Origin of Target Costing 2. Definition of Target Costing 3. Steps 4. Objectives 5. Process 6. Advantages 7. Reasons for the Late Development 8. Problems. Contents: Origin of Target Costing Definition of Target Costing Steps in Target Costing Objectives of Target Costing Target Costing Process […]

Strategic Cost Management Programme| Cost Accounting

The following points highlight the five main steps of strategic cost management programme. The steps are: 1. Focus 2. Planning and Training 3. Fact Finding 4. Analysis and Recommendations for Changes 5. Implementation. Strategic Cost Management Programme: Step # 1. Focus: Focus starts with reviewing the different strategies of the company. Reviewing the strategies will […]

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