So, direct labour costs are identifiable with individual units of product or job orders as far as practicable. They are also used for evaluating the performance of profit centres. Proper time-keeping in labour costing and control is very important because of the following reasons: These are the activities which are necessary to control the employees.
It should see that the production departments do not suffer from dearth of materials. Uniform costing is not a system of costing. The maximum amount of required information should flow to the system.
So, the amount of Rs. Here, the opportunity cost will be the amount of interest, i.
Variable costs are charged to production; fixed costs will be written off in full in the period to which they are attributable. It also provides a perpetual inventory of stores and other materials, so that interim financial statements can be prepared without stock taking.
Cost of each process is ascertained separately. A particular contract is treated as a whole job and the cost of the contract is ascertained.
Financial Accounting determines the financial results for a period and the state of affairs on the last day of the period. Uniform costing is not a system of costing.
It is a technique where standard costs are prepared in advance and used. Cost Accounting provides useful data to management for taking managerial decisions in the following areas: Inefficient materials control results in loss through misuse, and waste of resources may be caused by many factors like buying the wrong articles, buying materials of inadequate quality, buying too much, buying too little.
The cost and financial accounts could be interlocked into a single integral accounting system. These costs represent the cost of actual operational performance. For these purposes, we need Cost Accounting.
Cost Accounting, on the other hand, generates information for controlling operations with a view to maximising efficiency and profit. In an effective cost accounting system there must be a proper system for the control of material from the time an order is placed until the material is issued to production.
Due care should be taken for payment of wages to employees to ensure proper payment i.
These activities are those which support contribution activities but do not generate income. Objectives of Material Control: In other words, the benefit from resources which has been foregone for not being used in the manner originally planned.
In replacement cost, the current market price of an asset or materials is considered but not its original cost or written down cost. Notes on Prerequisites of Costing System: In replacement cost, the current market price of an asset or materials is considered but not its original cost or written down cost.
Sometimes it becomes useful in most businesses to subdivide the marketing cost into selling, publicity and distribution costs. This method of costing is applied in those business concerns where production is carried out as per specific order.Accounting Pdf provides unlimited PDF books, notes & guides of Financial, cost and management accounting, ACCA, CFA, CIMA, CPA, CMA, FRM and many more.
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Notes Basic Accounting Principles Business Environment 64 the results disclosed in the financial statements will be uniform and comparable. 3. Accrual: Accounting attempts to recognize non-cash events and circumstances as they occur. Accrual is concerned with expected future cash receipts and.
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Contents: Notes on Cost and Cost Accounting Notes on [ ].Download