ENGLISH ASSIGNMENT

COST ACCOUNTING

Compiled by :
NAME

: Mega Dinda Prizli

NIM

: 061430501326

ACCOUNTING OF POLYTECHNIC NEGERI SRIWIJAYA

2014

FOREWORD

With thanks giving Praise Allah SWT. Over his approval so that I can finish this
paper. Without His help compiler will not be able to finish well.
The paper is structured so that the reader can expand the science of operations
research, which we presented based on various sources. The paper was collactedby the
authors with many obstacles. Whether will from authours or coming from the outside.
This papercontains about the Cost Accounting. It discussed was the definition of
Cost Accounting , Function Cost Accounting and Purpose Cost Accounting.
Hopefully this paper can provide greater insight to the reader. The paper is still far
from perfection to the authours ask foe advice and critism. Thank You .

PART I
INTRODUCTION

A.

BACKGROUND

Recording the calculation of wealth began to be required since humans recognize the
meaning of the value of goods and means of exchange, since knowing the value of the sense
of goods, people to exchange goods with regard to the value of goods and require the
recording of calculating wealth (Accounting), the recording continues to evolve over time up
with the progress of human civilization. Recording a fuller line with developments in the
business world appeared in the city of Italy. Math expert monk named Lucas Paciolo in 1494.
Lucas proposed accounting system paciolo growing underlying accounting systems
wear in todays business world.
Cost accounting is the process of recording, classifying, summarize and presentation
of cost of manufacture and sale of products or services, in certain ways, and interpretation to
it. Cost in broadest sense is the sacrifice of economic resources, measured in units of money,
which has occurred or is likely to occur to achieve certain goals.
In the narrow sense of the cost is part of the cost of goods that was sacrificed in an
attempt to earn income.

B. FORMULATION PROBLEM

Based on the things above description and to steer discussion of the formulation of the
problem in this paper is as follows:
1. Definition of Accounting
2. Definition of Cost Accounting
3. Definition of Cost Accounting in broad sense and narrow
C. LIMITATION PROBLEM

In terms of the discussion will be undertaken to have coverage is limited, the authors
limit the issues as follows :
1. Definition of Accounting
2. Definition of Cost Accounting

D. PURPOSE AND OBJECTIVES

The purpose and goals to be achieved in this papers discussion is to obtain an

overview of the subject . the intent and purpose of making this papers are :
1. To know the definiton of general accounting
2. To asses the understanding of Cost Accounting in general and more size.
3. To determine the benefits of Cost Accounting and in order to know about the more
cost-Depth.
E. SYSTEM COST ACCOUNTING
1. Actual Cost System (System Cost Actual)
2. Standard Cost System (System Cost Standard)
F. COLLECTING SYSTEM COST
1. Job Order Cost
2. Process Cost
G. BENEFITS COST ACCOUNTING

1. Company Munafaktur
2. Services Company
H. COSTING TRADITIONAL PRODUCTS
1. Calculation of the cost of traditional products
I. LIMITATIONS COST ACCOUNTING SYSTEM

PART II

DISCUSSION

A. DEFINITION OF ACCOUNTING

Accounting is often called the language of the business (the Business language) because
accounting is a tool of corporate communications in informing economic events to which
required. Through the company's accounting reports can convey a message to those who want
to know the financial position, and the level of the enterprise perspective useful to help
decision.
American Institute Of Certified Public Accountan (AICPA) suggests that accounting is
the art of recording, classifying and pengiktisaran in a meaningful way and in the state in the
value of money. All transaction and event thet least a financial nature, and then interperst the
results. Art interpreted in terms of physical and wisdom.
Accouting American Association (AAA) also formulate that accounting is the process of
identifying, measuring and reporting economic information in a company that in the possible
exitence of asessment and decision making for those who use the information.

B. FUNCTION AND DEFINITION COST ACCOUNTING.

Definiton of Cost Acccounting is the process of recording, calssifyng summarize and
persentation cost of manufacture and sale of products or service, in certain ways, and
interpretation to it.
Cost in broadest sense is the sacrifice of economic resources. Measured in units of
money, which has occured or is likely to acour to achieve certain goals. In the narrow sense
of the cost is part of the cost of goods that was sacrificed in an attempt to earn income.
Another Understanding Cost accounting is one branch of accounting is a management
tool to monitor and record transaction costs systematically, and presenting information in the
form of fee expense report. Cost (cost) different cost (cost) is the economic sacrifice incurred
to acquire goods and services, while the load (expense) is expired, namely the cost of
sacrifice required or issued for the realization of the results, this burden associated with
revenue in the period running.Sacrifice that has nothing to do with the acquisition of assets,
goods or services and also has nothing to do with actual sales results, then it is not classed as
a cost or expense but is classified as a loss.

Cost Accounting Functions Namely :

a. To measure the sacrifice of the input values in order to generate information for
the management, whether a profit or not.
b. Generate information for management as a basis for planning the allocation of
Economic resources are sacrificed to produce output.

Management fee :
a. Requires a deper understanding of the cost structure of a company.
b. Manager should be able to determine activity and the short-term and long-term
Cost Management Information.

The information needed to process effectively yhe company or non-profit

organizations information regarding :
a. Financial information = Cost and Revenue
b. The non-financial information that is relevant (productivity, quality and other key
factors) use internal parties to assist management.

The process of recording, classifying, peringkasan and presentation, and interpretation

of cost information is dependent for whom the process ditujukaan. Cost accounting process
can be directed to meet the needs of users outside the company, in this case the Cost
accounting .

FINANCE AND ACCOUNTING DIFFERENCES MANAGERIAL ACCOUNTING

Equation:

Both types of accounting is an information processing system that produces financial

information.
As a provider of financial information that is useful for a person to make decisions.

Differences :

User Accounting report and their purpose

Reach Information.
Focus Information
About Time
Criteria for Accounting Information
Discipline source
Content Report
Nature Information

The following figure is an explanation of the differences between the two types are :
Principal difference Financial Accounting and Managerial Accounting
No. Description Financial Accounting Management Accounting
1. Main users the top managers and mind managers from different right outside the
company. Level of organization.
2. Scope of the company as part of the companys all information.
3. Focus oriented during the period information ago to come.

4. The time span less flexible. Ussualy flexible : can be daily, week spanning a period of
ku-an, monthly, even 10 artalan, middle years, than annual.
5. Criteria for constrained by the principle account there are no restrictions, axceptansi
of aacounting information common benefits that can diperontansi by manager of
information then sacrifice to obtain an information.
6. Discipline resource economic and psycology social.
7. Fill in the form of a summary report are detailed regarding the company .
8. Nature of infortmation accuracy of information element in informal estimates.
Process cost accounting can be on the show as well to meet the needs of users in the
enterprise. Thus the cost accounting must consider the characteristics of management
accounting.
Cost accounting has three main objectives namely: determining the cost of the
product, cost control, and penganbilan special decision. To meet the objective of determining
the cost of the product, cost accounting record classification and summarize the costs of
making products or delivery of services. Fees collected and presented is the cost to determine
the cost of the product is intended to satisfy the needs of parties outside the company.
Therefore, in order to serve the needs of external parties, cost accounting for the
pricing of products subject to the principles of common accounting. In addition, determining
the cost of the product to meet the needs of those served by the management accounting are
not always bound by a common accounting principles. For example, variable costing method
for determining the cost of the product and the presentation of cost information to meet the
needs of management in planning and decision control short term.
Controlling costs must be preceded by the determination of costs that should be
incurred to memeproduksi only product. If the costs of this should have been established, cost
accounting is to monitor whether the actual expenses in accordance with the supposed costs.
Cost accounting penyimpana then conduct an analysis of the actual costs and expenses should
present information about the cause of such difference.
From the analysis of the causes of the irregularities and the management will be able
to consider corrective action, if it is necessary. From this analysis also top management will
be able to undertake an assessment of the achievements of the managers underneath.
accountant control objectives the costs for these costs is intended to meet the needs of the
company. Aspects of human behavior in a cost accounting for cost control is a major goal.
Thus the cost accounting for cost control purposes is part of management accounting. See the
standard cost system, either with a full costing method (Chapter 13 standard cost system variable costing method) specific decision-making regarding the future. Therefore,
information that is relevant to the specific decision making presents a future cost (future
costs). This cost information is not recorded in the accounting records costs, but rather the
result of a process of forecasting. Because of a special decision constitutes the bulk of the
company's management activities, cost accounting reports to meet the objectives control
decision is part of management accounting.

To meet part of the needs of management in decision making, cost accounting develop
various concepts of cost information for decision making, such as, the opportunity cost
(Ooportunity cost), the cost of Hypothetical (hypothical cost), additional costs (incremental
costs), costs avoided (avoidable costs) and lost revenue (revenue forgone).

C. BENEFITS COST ACCOUNTING

The purpose or benefit of cost accounting is to provide one information required by

management in managing the company, namely for :

Planning and control gain. Cost accounting provides information or past cost data
necesarry for planning and the next on the basis of these plans, cost can be controlled
and ultimately control can be used as feedback for improvement in the future.
Determination of Cost of Products or Services. Pricing of goods will be able to
assist in:
a. good inventory valuation inventory of finished goods and work in process.
b. setting the selling price primarily selling price based contract, although not always
determining the selling price based on the price of goods.
c. the determination of profit.
Decision by Management.
To generate future benefits.

Cost Accounting Purpose Namely to provide cost information for management

purposes in order to assist them in managing the company or parts there of.

D. CLASSIFICATION COST

Cost accounting aims to provide cost information that is used for various purposes, so
that classification of costs is also based on adapted to that purpose.
Cost classification (Classification Cost).
Costs can be classified into several groups on the basis, which is as follows:
Object Spending
Function company principal
Relationship Costs with Something Funded.
Basic his behavior on Volume Change event.
Period time
There are several ways that can be used to.
classify expenses include:

Based on the Principal Function Company

a. Factory Cost
1. Raw Material Costs (Direct Material Cost)
2. Labor Costs Direct (Direct Labor Cost)

3. Indirect Costs (Factory Overhead)

b. Commercial Expense (Operating Expense)
1. Marketing and Selling Expense
2. General & Administration Expense
Based Accounting Periods
a. Capital expenditure , this expenditure will give benefits in several accounting
periods. This kind of expenditure capitalized and included as cost. An expenditure
classsified as a capital expenditure if the expenditure it gives benefit more than
one accounting period, the number is relativetly large, and this expenditure
nonroutine.
b. Revenue expenditure, ill benefits in the accounting period in which these
expenditure occurred. This discharge a burden in the period, and included in the
income statment.
Under the Influence Of Cost Management
a. Controlled costs (Controllable Cost). Are costs directly can be affected by a
certain level managers within certain time.
b. Cost Controlled (uncontrollable Cost). Are costs that can not be influenced by a
particular manager or official levels.
Characteristics of Costs Associated With output
a. Engineered costs. Is a cost element that has an explicit physical relationship with
the output.
b. Discretionary costs. This fee is called also managed cost or programmed costs are
all costs that do not have an accurate correlation with output.
c. Commited fee or charge capacity. Are all costs incurred in order to maintain the
capacity or ability of the organization in the activities of production, marketing
and administration.
Effects of Changes in Volume Activity Against Fees
a. Fixed cost. Ie the costs are not affected by changes in the amount of the volume of
activity to a certain extent. Fixed costs per unit change inversely with changes in
the volume of activity.
b. Variable costs. Variable costs assuming a linear relationship between costs these
activities. Variable costs are costs that the total change on a comparable basis with
changes in the volume of activity, the greater the volume activities, the greater the
total amount of variable costs.
c. Semi-variable costs. Namely the cost of which the total change in accordance with
changes in the volume of activity, but the nature of the changes are not
proportional / proportional.
Based on the Object financed
a. Direct cost. The costs incurred or benefits can be identified to an object or a
particular cost center.
b. Indirect Costs. The costs incurred or benefits can not be identified on an object or
a particular cost center, or cost benefits enjoyed by some object or a cost center.

E.COST ACCOUNTING SYSTEM

Cost accounting system (cost system) can be grouped into two system, namely:

1. Actual Cost System (System Cost Actual). the system charging the cost of the product
or orders generated in accordance the actual cost of enjoyed. In this system, the cost
of goods The new production may be calculated at the end of the period after the
actual costs collected.
2. Standard Cost System (System Cost Standard). Namely the cost of loading system to
a product or orders generated by the cost of goods that have been determined /
assessed before a product or order done. ABC (Activity Based Cost) System Tested in
the early 1990s in the USA.
F. COLLECTING SYSTEM COST

1. Job Order Cost. Which is a method of collecting the price of staple products collected
for each order or contract. So every order has its own basic price made in job cost
sheet. On This method, production is done to fulfill customer orders.
2. Process Cost. The method of collection cost of the product which costs collected for
each unit of time. In this method, the production process the company carried out
continuously, the goods produced homogeneous, and the production cost price
calculation based on the time. On This method, production is done to meet the stock.

G. BENEFITS COST ACCOUNTING

1. Company Munafaktur
Cost accounting system has the purpose of measuring and charging so the cost
per unit of a product can be determined. Cost information perunit is very important
for companies manufacturing for inventory valuation, determination of the profits,
and other decision-making. Disclosure charge inventory and determination of the
profits are facing financial reporting needs of each company at the end of each
period. To determine the cost per unit, the total costs used depending on the purpose
of the information. Companies can use fee production, or the variable costs, or the
cost of production plus a non-production costs. For financial reporting for external
parties, then the per unit cost information obtained from the total cost of production,
while for the decision to accept or reject special orders, the company operates under
the conditions of the production capacity, the cost of the required information is
information of variable costs. Munafaktur company, generally accounting costs are
covered in this course are applied in manufacturing companies. The reason is more
complex when compared dg other companies. The principal activities of
manufacturing companies that process raw materials into finished products ready for
sale.
Principal functions in manufacturing :
a. Production principal
b. Marketing function
c. General and administrative function

Based on the above functions, then the manufacturing company can be divided into:
Production costs, marketing costs and general and administrative costs.
Namely Manufacturing Company companies whose activities are processing raw
materials into finished products and sell these products to consumers or other
manufacturing company.
Event processing raw materials into finished products to trust Lukan 3 groups
sacrifice of economic resources, namely:
1. The sacrifice of raw materials
2. The sacrifice of labor services, and
3. The sacrifice of facility services.
In marketing the finished products, also require the sacrifice of economic resources,
namely:
1. Cost of production: consists of raw material costs, direct labor costs and factory
overhead cost.
2. Marketing costs
3. General and administrative costs.
Trading company whose activities company to buy merchandise from other
companies and sell goods to consumers or manufacturers.
To get the merchandise, trading company to pay, which in the income statement
grouped into 3 categories namely:
a. Cost of goods sold
b. Marketing costs General and administrative costs
2. Services Company
Information services company also requires the cost per unit. Basically to
calculate the cost per unit between service firms and companies Manufacturing is the
same. First of all, the company services provided and identifying the total cost for a
unit of service provided. Service companies and manufacturing companies using cost
data with the same goal, which is to determine profitability, eligibility for introducing
new services, making decisions and other selling price, only service companies do
not require cost data to determine the value of inventories, because the services do
not produce physical products.

H. COSTING TRADITIONAL PRODUCTS

Calculation of the cost of traditional products only charge the cost of production on the
product. The main charges keproduk no difficulty, because it can use the direct search or
search drive very accurate. But instead, overhead costs have problems in charging for the
product, because the relationship between input and output can not be observed
physically. In the traditional cost system, to charge to the product used activator activity

level unit (unit-level drivers), because these are factors that lead to changes in costs as a
result of changes in units produced. Examples propulsion unit level which is generally
used for overhead charge include:
1. Units produced
2. Hours of direct labor
3. Direct labor (rupiah)
4. Hours engine
5. Direct Materials
After identifying the driver (driver) level unit, and predicts the output level of activity
as measured by the mover, namely whether based on the expected actual activities
(expected activity level) and activity normal (normal activity level). Expected activity
level is the expected output of the activity achieved by the company in the coming year,
while normal activity level is output average activity which is the company's experience
in the long term. Normal activity has the advantage of using the same level of activity
from year to year, so the loading overhead to the product not so volatile.

I. LIMITATIONS COST ACCOUNTING SYSTEM

Rates thorough plant and has been used several departmental rates decades and continues
to be used successfully. However, in some situations rates The cause distortion that can
create stress companies production in a production environment of advanced (advanced
manufacturing environment).

BIBLIOGRAPHY

1. Mulyadi, 2002. Cost Accounting, Yogyakarta: Aditya Media

2. Mulyadi, Cost Accounting, Yogyakarta: Yogyakarta BPFE 2008
3. Erlina, SE: understanding the function and cost accounting
Faculty of Economics, University of North Sumatra.
4. Soemarso SR Accounting I and II an introduction to the second edition, Jakarta:
Lenbaga publisher FEUI
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PART III
CLOSING

CONCLUSION
1. Definition and Purpose of Cost Accounting
Definition of Cost Accounting is the process of recording, classifying, peringkasan
and presentation of cost of manufacture and sale of products or services, in certain
ways, and interpretation to it.
Cost in broadest sense is the sacrifice of economic resources, measured in units of
money, which has occurred or is likely to occur to achieve certain goals. In the narrow
sense of the cost is part of the cost of goods that was sacrificed in an attempt to earn
income.

Namely Cost Accounting goal to provide cost information for management purposes
in order to assist them in managing the company or parts thereof.
Munafaktur company, generally accounting costs are covered in this course are
applied in manufacturing companies. The reason is more complex when compared dg
other companies. The principal activities of manufacturing companies that process
raw materials into finished products ready for sale.
Principal functions in manufacturing :
a. Production function
b. Marketing function
c. General and administrative functions.
based the above functions, then the manufacturing company can be divided
into: Production costs, marketing costs and general and administrative costs.
2. Classification of Costs (Cost Classification)
Costs can be classified into several groups on the basis, which is as follows:
1. Object Spending
2. Function Company Principal.
3. Relationship Costs with Something Funded.
4. Basic his behavior on Volume Change event.
5. Period time
3. Method of Production Cost collection.
Collecting the cost of production can be determined by means of production, namely:
a. Production on the basis of the order and
b. production. Companies that produce by order using the order cost (job order cost
method). Meanwhile, companies that mass produce, collect the cost of production
by using the cost method process (process cost method).
4. Method of Determining the Cost of Production
That is a way of taking into account the elements of costs to the cost of production.
There are two approaches: (1) Full Costing and (2) Variable Costing. Full Costing is a
method of determining the cost of production which takes into account all elements of
the production costs of goods manufactured ala ked both variable and fixed. Variable
Costing the method of determining the cost of production which takes into account
only the variable costs of production that behaves in the cost of production.
5. Comparison of Income Statement Manufacturing Company with the Income
Statement of the Firm Trade.
Trading company whose activities company to buy merchandise from other
companies and sell goods to consumers or manufacturers. To get the merchandise,
trading company to pay, which in the income statement grouped into 3 categories
namely:
a. Cost of goods sold
b. Marketing costs
c. General and administrative costs
Namely Manufacturing Company companies whose activities are processing raw
materials into finished products and sell these products to consumers or other
manufacturing companies.

Event processing raw materials into finished products to trust Lukan 3 groups
sacrifice of economic resources, namely:
a. The sacrifice of raw materials
b. The sacrifice of labor services, and
c. The sacrifice of facility services.
In marketing the finished products, also require the sacrifice of
namely:

resources,

a. Cost of production: consists of raw material costs, direct labor costs and factory
overhead costs.
b. Marketing costs
c. General and administrative costs.

Questions :
1. What is meant by Accounting ?
2. Explain Definition of cost accounting ?
3. Explain the similarites and differences in financial accounting and management
accounting?
4. Explain the benefits of cost accounting ?
5. Explain the classification of accounting cost ?
6. What is meant by capital expenditure ?
7. What is meant by process cost?
8. What is meant by Actual cost system ?
9. What is meant by Standard cost system ?
10. What is mean by job order cost ?

Answer :
1. Definition of Cost Accounting is the process of recording, classifying, peringkasan
and presentation of cost of manufacture and sale of products or services, in certain
ways, and interpretation to it.
Cost in broadest sense is the sacrifice of economic resources, measured in units of
money, which has occurred or is likely to occur to achieve certain goals. In the
narrow sense of the cost is part of the cost of goods that was sacrificed in an
attempt to earn income.
2. Definiton of Cost Acccounting is the process of recording, calssifyng summarize
and persentation cost of manufacture and sale of products or service, in certain
ways, and interpretation to it.
3. *Both types of accounting is an information processing system that produces
financial information. And As a provider of financial information that is useful for
a person to make decisions. *User Accounting report and their purpose Reach
Information, Focus Information, About Time, Criteria for Accounting Information,
Discipline source, Content Report, Nature Information.
4. The purpose or benefit of cost accounting is to provide one information required
by management in managing the company.
5. Costs can be classified into several groups on the basis, which is as follows:
Object Spending, Function Company Principal, Relationship Costs with
Something Funded, Basic his behavior on Volume Change event, Period time.
6. Capital expenditure , this expenditure will give benefits in several accounting
periods. This kind of expenditure capitalized and included as cost. An expenditure

classsified as a capital expenditure if the expenditure it gives benefit more than

one accounting period, the number is relativetly large, and this expenditure
nonroutine.
7. Process Cost. The method of collection cost of the product which costs collected
for each unit of time. In this method, the production process the company carried
out continuously, the goods produced homogeneous, and the production cost price
calculation based on the time. On This method, production is done to meet the
stock.
8. Actual Cost System (System Cost Actual). the system charging the cost of the
product or orders generated in accordance the actual cost of enjoyed. In this
system, the cost of goods The new production may be calculated at the end of the
period after the actual costs collected.
9. Standard Cost System (System Cost Standard). Namely the cost of loading system
to a product or orders generated by the cost of goods that have been determined /
assessed before a product or order done. ABC (Activity Based Cost) System
Tested in the early 1990s in the USA.
10. Job Order Cost. Which is a method of collecting the price of staple products
collected for each order or contract. So every order has its own basic price made
in job cost sheet. On This method, production is done to fulfill customer orders.