All You Need To Know About Cost Accounting

 A cost accountant is basically a method of accounting wherein all the costs involved in performing any project or product are noted and analyzed. Also, such analysis assists the management in taking strategic decisions. Cost accounting utilizes various techniques to make an organization cost-effective. Therefore it helps every organization to run its strategies perfectly. Cost accountant also involves accounting equation assignment help.

Today, let’s take a brief idea on how cost accounting helps in the daily work of every organization and what are the features?

How is cost accounting different from financial accounting?

1.        Generally, in traditional accounting, the profit and loss are derived by deducting expenses from income, whereas in cost accounting, the motive is to be cost-effective by reducing costs of process, production or project.

2.        Financial accounting views an organization entirely, whereas cost accounting segregates the organization into various processes, projects, or production units.

3.        Financial accounting is used to present the organisation's position to its stakeholders, whereas cost accounting is used for internal review of costs.

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Which are the basic elements of cost in general?

For a standard manufacturing unit, the various costs involved can be segregated into the following:

l  Material

l  Labour

l  Other expenses

l  These can be further divided into the following:

l  Direct

l  Indirect

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Which are the different types of costs?

For analyzing the various costs, it is imperative first to understand the types of costs.

Fixed Costs: These costs are specialized and remain constant despite changes in production, process or projects are referred to as fixed costs.

Variable Costs: These specific costs are involved and vary with the production, process or project changes. For example, in an organization manufacturing, the material and labour cost will depend on the production.

Opportunity Cost: This particular cost incurred in selecting one option over another is called opportunity cost.

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Which are the techniques in Cost Accounting?

The techniques of costing facilitate managerial decision making. The different types of methods are:

l  Marginal Costing

l  Standard Costing

l  Direct Costing

l  Historical Costing

l  Uniform Costing

l  Absorption Costing

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