SUBMITTED BY :

SUBMITTED TO :
PIYUSH ARORA
SURENDRA KUNAL CHOUDHARY
MALVIYA MOHIT MANDANI
Cost means the amount of
expenditure ( actual or
notional) incurred on, or
attributable to, a given
thing.
 Cost accounting is concerned with
recording, classifying and
summarizing costs for determination
of costs of products or services,
planning, controlling and reducing
such costs and furnishing of
information to management for
decision making
 COST

MATERIALS LABOUR OTHER EXPENSES

DIRECT INDIRECT DIRECT INDIRECT

DIRECT INDIRECT

ELEMENTS
OF
COST
TYPES OF MATERIAL
Direct material is one which can be
directly or easily identified in the product.
Eg: Timber in furniture, Cloth in dress, etc.

Indirect material is one which cannot be easily

identified in the product.
 At factory level – lubricants, oil,
consumables, etc.
 At office level – Printing & stationery,
Brooms, Dusters, etc.
 At selling & dist. level – Packing materials,
printing & stationery, etc.
TYPES OF LABOUR
DIRECT LABOUR is one which can be
conveniently identified or attributed wholly to a
particular job, product or process. Eg: wages
paid to carpenter, fees paid to tailor, etc.

INDIRECT LABOUR is one which cannot be

conveniently identified or attributed wholly to a
particular job, product or process.
 At factory level – foremen’s salary, works
manager’s salary, gate keeper’s salary,etc

 At office level – Accountant’s salary, GM’s

salary, Manager’s salary, etc.

 At selling and dist.level – salesmen

salaries, Logistics manager salary, etc.
TYPES OF OTHER EXPENSES
DIRECT EXPENSES are those expenses
which can be directly allocated to particular job,
process or product. Eg : Excise duty, royalty,
special hire charges, etc.
INDIRECT EXPENSES are those expenses
which cannot be directly allocated to particular
job, process or product.
 At factory level – factory rent, factory
insurance, lighting, etc.

 At office level – office rent, office

insurance, office lighting, etc.

 At sales & dist.level – advertising, show

room expenses like rent, insurance, etc.
1) JOB COSTING
2) CONTRACT COSTING
3) BATCH COSTING
4) PROCESS COSTING
5) UNIT COSTING
6) OPERATING COSTING
7) OPERATION COSTING
8) MULTIPLE COSTING
1) JOB COSTING :
This method applies where work is undertaken to
customers special requirement.Example are interior
decoration,painting,etc.

2) CONTRACT COSTING :
This method applies where bigger job is assignes for
longer duration.Example are ship
building,bridges,dams,etc
3) BATCH COSTING:
This method applies where the cost of a batch or
group of identical products is ascertained.
Example are shoes,tyres,toys,etc.

4) PROCESS COSTING:
This method is used in mass production industries
manufacturing standardised productsin continous
process of manufacturing.Example are sugar
mill,oil refineries,etc
5) UNIT COSTING :
This method applies when production is uniform and
consists of a single or two or three varities of the same
product.Example are garments,tyre tubes,etc.

6) OPERATING COSTING :
This method applies where sevices are provided
instead of manufacturing products.
Example are roadways,airlines,hotel,cinemas,etc.
7) OPERATION COSTING :
This method applies where no. Of operations are to
be performed before manufacturing a product. It
ensures greater accuracy. Example are manufacturing
of sugar, salt, etc.

8) MULTIPLE COSTING :
This method applies where more then one method of
cost ascertainment is required with response to same
product. Example are air conditioners, refrigerators,
scooters, etc.