Cost-INTO
Transcript of Cost-INTO
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PARAMJIT SHARMA
Financial
Accounting
Cost
AccountingManagement
Accounting
The art of Recording, Classifying,And summarizing in terms
of money ,transactions and events
which are of financial Nature,
and interpreting the results
thereof
Accounting
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PARAMJIT SHARMA
WhatWould Be The Role Of Financial Accounting ?
WhatW
ould Be The role Of Cost Accounting ?WhatWould Be Role Of Management Accounting ?
Manufacturing & Marketing Cars
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PARAMJIT SHARMA
Reducing Cost of the car by INR 10,000
Manufacturing & Marketing Cars
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PARAMJIT SHARMA
FundamentalsFinancial Statements
PROFIT & LOSS
ACCOUNTBALANCE-SHEET
STATEMENT OFSOURCES &
APPLICATIONS OF
FUNDS
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PARAMJIT SHARMA
FundamentalsFinancial Accounting- limitations
HISTORICAL ONLY NET RESULTS
NO CONTROL
ON COST
NO DISTINCTION
Direct & Indirect
Inadequate Information
For PRICE FIXATION
NO COMPARISON OFCOSTS
NO STANDARDS TO
Assess Performance
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PARAMJIT SHARMA
FundamentalsFew Terms - clarification
COST ACCOUNTANCY
It is the application of Costing and Cost Accounting
Principles, Methods and Techniques to the science,
art and practice of Cost Control and the ascertainment
of profitability. It includes the presentation of information
derived there from for the purpose of ManagerialDecision Making
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PARAMJIT SHARMA
FundamentalsCOST ACCOUNTING- introduction
The Process of accounting for costs from the
Point at which expenditure is incurred or
committed to the establishment of its ultimate
relationship with cost centers and cost units
Books
Of Cost AccountsCost Centers
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PARAMJIT SHARMA
Costing Objectives
Setting
Price
Ascertaining
costCost
Review
Cost
Control
Operating
Decisions
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PARAMJIT SHARMA
FundamentalsCost /Financial Accounting- differences
Need
Purpose
Recording
ProfitAnalysis
Contents
Compulsory Obligatory
Final Results to stake
Holders
Subjective Recording
Total Profit/Loss
External Transactions
Cost Information
Objective Recording
Product wise
Internal
FA CAFactor
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PARAMJIT SHARMA
FundamentalsManagement/Cost Accounting- differences
Derivation Of Data
Information Provided
Emphasis
Purpose
Planning
Techniques
Installation
Cost/Financial Acct
Cost/Fin. Information
CVP/Fin Ratios
Decision Making
Planning, Decision M
& Control
Short/Long Term
RA,FF, C Flow
Not possible without
CA system
Data From CA
Only Cost Inf.
Cost Ascertainment& Control
Reporting Cost
Short Term
Variable Costing,
Budgetary Control etc
Can Be Installed
Without CA
factor MA C A
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PARAMJIT SHARMA
FundamentalsCost Accounting- advantages
Supplies Detailed Cost Information
Helps in Price Fixation
Reveals UN (Profitable) ActivitiesReveals idle capacity
Assist in Controlling Costs
Helps in decision MakingFacilitates Cost Comparison
Helps in Inventory Control
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PARAMJIT SHARMA
FundamentalsCosting Methods
Job Costing
Batch Costing
Contract Costing
Process Costing
Unit Costing
Operation CostingOperating Costing
Multiple Costing
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PARAMJIT SHARMA
FundamentalsCosting Techniques
Historical Costing
Standard Costing
Marginal Costing
Absorption Costing
Direct Costing
Uniform Costing
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PARAMJIT SHARMA
FundamentalsInstallation Of Costing System
Nature Of Business
Structure of Organization
Objectives and Expectations
Cooperation and support Of staff
Standardization of Forms
Prompt Reporting
Flexibility
Reconciliation of FA & CA
Current PracticesSimplicity
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PARAMJIT SHARMA
FundamentalsInstallation Of Costing System-difficulties
Lack Of Management Support
Resistance Of Staff Non Cooperation From Other Levels
Shortage Of Trained Staff
Heavy Cost Of Operating The System
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PARAMJIT SHARMA
Fundamentals
Time for Questions