Archive | Cost Accounting

Allocation of Overhead Cost | Industries | Cost Accounting

Among the many methods that have been adopted to apply overhead to production, the most common ones have been dealt below:- 1. Percentage of Direct Labour Cost. 2. Percentage of Direct Material Cost. 3. Prime Cost Percentage Rate. 4. Labour Hour Rate. 5. Machine Hour Rate. 6. Production Unit Method. Method # 1. Percentage of […]

Cost: Elements, Nature and Types | Industry

After reading this article you will learn about:- 1. Elements of Cost 2. Nature of Cost 3. Types. Elements of Cost: The costs of an industrial enterprise may be divided into three principle elements, namely: 1. Material. 2. Labour. 3. Expense. 1. Material Cost: It is the cost of commodities supplied to an undertaking. It […]

Standard Cost: Meaning, Determination and Advantages

After reading this article you will learn about:- 1. Meaning of Standard Cost 2. Determination of Standard Costs 3. Advantages. Meaning of Standard Cost: It is the pre-determined cost of a product. After compiling different expenses, an estimated cost of product is forecasted, which is known as “Standard cost”. It is used as a device […]

Costing: Meaning, Aims and Methods | Cost Accounting

After reading this article you will learn about:- 1. Meaning of Costing 2. Aims of Costing 3. Methods 4. Advantages. Meaning of Costing: Costing has been defined by the Institute of Cost and Works Accountants, England as: “The technique and process of ascertaining costs.” Whereas, Wheldon has defined the costing as: “Costing is the classifying, […]

Cost Types: 8 Main Types of Costs

Since there are large number of determinants which influence the cost. These determinants vary from situation to situation, and enterprise to enterprise. Therefore for taking a decision about any such determinants, we must analyse them thoroughly. In order to take write deci­sions, it is necessary to understand different costs. Some of them are explained hereunder: […]

How to Keep Control over Elements of Cost?

To earn good profits, it is essential to keep control over each and every ele­ment of cost, such as: 1. Control on Prime Cost 2. Control on Overheads 3. Control on Indirect Materials and Tools. 1. Control on Prime Cost: Prime cost of a product has great role over the total cost. It consists of […]