Cost Pcccunting desig nment

Unit Tmbodution o Dept No AouCMAOb2

Cosl Acco unt ing

I1 Meaning Lost Petoumtivneg
LDAt Accowmtrq

Tt tA metho Aecming or Coat

the
The preh o necorolin and aCcownting for all

elemnbs o Cost called Cost dccoing

CM.A has deltned Cost Accomtivg as

A Th prores eaccouliig or Cost om

hom u
u

Comitted
erperolituww unned or

peint at whih
nehtrionskip Luilt
establihment eitsltiate
to the it
units Tn ib widest umqe
Cost Certres and Cost
stalistis avd thu
and the
embracesBre prupnakion o
embnaces
Actiuities Canied
tabilty
astentaiment e ha þrof
Out orplanmd.
 Stope
Stope ard objetiues Cost Bcccunti
Scope dCost Accwting
The temstop heu uuv o iold o
adiity CDst Accowdivg sConeoned uith ascetaimmut

and Conbol t ( A
CoABTh normalion YOuded
prouided tu

managemunt s helptul or tost nbrol and cost neduke

and
boough Aunon planning deciion making
Loctiol
In th naGal sages o evaluaHon (nst actomtiy
b
o ost astetaîn munt and pruetat1m
Conlined ibe
h
samt ith ba main obiecfiue d Ahdig
proiding
roolvet Lost
Seope et Cost accouting
Scope
Cost Lonbrol andl CDst uductio
Jnkomatiom oh
In
In addition o enlagenmurt Scope, tha

Ohea Applicalion Cost aclouneivq aho

wdened. Noo, I t oppkied h senice Onauisaho

o hmant Crqauictbns local authoites etc.

 Obteis ecos Aecani
Main Objectiwas u

a)Costvding OY os ascentaimud

6) Control o ost

c)Redutfon o ost

d Fixakion spelig pe
busines
e
e)
9powiding nfovmalion fov bmu n
poluy
* Cost ndin OY COAt astentaiumnent

u
pYi maoy ebjectie o Cost alcoutivg

QMertainment Cst Tt i dou thnough lu mthods

and kedhna ws o tos ting.

Contul cCost

AAasit unHon Cost actowntiva

Control Costs n Crden to knoo h eivny leu

Orqauisation and t Vanicus Depantments ard Cost

Cenbes budgets laboun ad oveahads whih au

 Companed tuith the actal pouovmante
Cost nedution
urdestod as u
Cost neduction i to be

and permanent Juduon In tu Luit

QChieuument o aal
senwtes endewd
OY
Cost ogeols manulachuud
ui thout impai tiein Auitability or thu e inkended
Yg
impaivihg
Dst uduchion thnough Bu techdaues Contol,labout

Conbrel oheods
Hxabon selng prie

ThePruce aPYaduet Conist o

total lost and hu mangin nequived Cost acowting

Paouole debailed infomalon negardin btal Cost n

thu bom yanious (mponents Thuy

Thay also pveouide

neovmakiom in terms ined lost and yaiable

Cost intensine Compition ete Can e dee

decided
 nami na busine pocy
CDst to Kelp bu
Acceunlinshiu
buines poliiy and
manaqemut un ormulatirg
Onalysi Cbst
decision making Buak euun

tDstv ete
Volume PveRt aelationship, dilkuntial

u inAakydeciim
Qu melpfl management

9egooding
Pnoduet oiuonlinuaion oa piadud,
> UHksakon idle capmity
The mo protable Sales mix,
PHennaliuws baxd on ke actor
Export destons
Make Or b dectons ekc
 l2 Intodvcion to Cost Auditneconds ad Cost
Alardands
*Tnboduckicn to cok Aucht
Cost Audit
Veiktcalion dkccks Atcoum
AudRt means

Cost Auclt
Ond Vovches do estahh thir acwnad

measu Cot Audt a quide

Pnenti w

TDY Poliyomulation anod deca cbn makig

makug.

DeriHon o Lost Auclit

Maunaament
Accownt ats,
Chatered Trditute

as Re Venikicabi'on Cost
he Venicai'on
tost Aucbt
Aordlon delnes h Cont
adherene o
aa chetk on he
Octownts aro

aLcowntng plan

Thus
hush terms est Audliteeai do the follocuing
tuo uncbions

Verujicalion otost atcowrb toinal wheker

u
h a Coreedtly eept in actomlance
 Prinuples o (otin
Venification Accutay tot Accounks upm
ard to detect erres
and pnwt
statements

auds
Tnbroduction to Cost Records
Cost teconods

e conds means lcoks accowt nelabn

nelatng
Cost
laboun
Onel
anol ohon items
0he items
materials ,
DCatiNsation

appicable to
fhu preolocbion q qcoos
gocols
Cost as
prouded AD Sechon
OY jon oAenuices as
pYos
48
48 Be Act and the yalue

Pnovisior Relatirgto CoN neconeds

aintaun Cost necogds in
EE
uy lompanyshall

orm CRA 1

The Cost newrds Shal Jue hmaintained On

neqular hasis such manne as to faulate

Caleulat ion d p udt Cost o pMoductfon oT Cost
bopexabions ano mgn each ib pYoduct

aund ackuitieso eww nandal yean

The Cost aecp nds hall Jue maitainud to exerid

0s an as posible Contyo o yaiousepuxubion

eConomi es in uHiation
and Cos to achieu bptimum

neso wes

T also paovides neeesay data whih i

wd these eles
heauiyed o be fuanshed

Intbvoductfon do standad Costivg

StardardCoskig
Standand Coting an
impentant subtopic
Cost acouning Ralfhen than awigna u

material, dvec laboun

actu Costs dived

Qnod manuactuirq head o apaodut,

manu manuacturen ous ign u enpected br standand
 Det Standarod Cosliny ard the 91elatedlVaianle
a valuable maraq ement eol avaiante

auses manaqemnt hecomes uwane that manathuvingd

Costs au dkeuntom standard cost

Qrecden tan hu
Aha Costs at

wnavownable
Stardavd Costs th Vavuante

Jes than h
Ahal Cost au standad

Cost thu Vaiane unlauounable A avowrable

VOiarxe tells maraqemut that ewrylung else

tays tontont h acual prolt uall likely

Gxceed du plunned prdt
1-3 Advant ages of LoAt acLowfirq

innanial awunting ae
Dertiencios
The adyutaqes E
Conm pensated by Cost aCtowdiv
stake-holdurs" u diuwed helao
Chfen to all tu
1)To th Manaqemont

Etkchu dleciim malinq

Heaswing eRency
COA neduction

Fixation sellirg prie

Eecti CDst Conbrol

Intuase
Eectiue nunbry Csnbrd
Reouekicn of wastaqe
ecie uiliratfom usnnes

alp in ctue beqelig.

EMecbu olecstn Haki
Cost aCcountiy Preuwiols inprmulton Yegardie

dliuaio an Cost
Ardliuidual pnaducbs, dupritmunh
 Centus improu Onall
pvel? tabili ty
Mecsurung edenty
wi the help o Cost actountiv

managemwd Can et budqets and stnbrds ffor

or

Varücus elements tosttost ard Compau dthom uit achal

Vaious
to meas ws
ieng
Cogt neducfon
Coxt
CDxt
acLouning helpt Jo manaq emert in
9teolvction Cost
thnough ib kechniaus un efiiort
adl
eue vbisaHon Rouo mateials , laboun ard
pptimum prodluchion ooutput

*
alion dellivg prce

Cost acowmtiry pvowidles inkormation wdu,

Vasicus Clasliation On tham 6n the si d
ehouiou Lnst aualab ili ty e Prkormahon dei
and Cost helps in
9teHaroli hg Variable ed
Seling prite wdn diwnt_Crunstance
 1)

Eecfi Cost Conhol

Tu uwdamutal objeciw ost aClowntinq

t o Qslertain and Corntaol Coss hu Beqne9atiom of

Cost at
diwnt staps s helpkul in euin Covlbol

thocugh standarol Costing ad budgetau (onbol

1 To t
employees
3tabitity tenue
Fan wage poioy
Rewands tor
or highe ekuen u tarugh
nteni schems
Stabitts tentu tom
Agood CosEir systons is helptul to

n in pyoduciurby and prektahility

haragemuds uasung

ain wage po liy and suitable SnCentiue schumu

Stree Cost accowntirg ystems Reeps neconols

o Cash element oCost labou ours Ord
 labewn CDAt avu conded n Jul dekai

Hi)o th Cuditos

> Caanting Aibsidies

planing owseunte
Uaiahom Aane s buaes
(nedi to

Cneditons en mns o a 4i, du

Bolove th
and
Can auu ete udostarding e pogeo
proq nes

nelenant opeats
proklalsitty Bu m dicugh
iv) T0 u CroNnmunt
Urderstard he proqnes au poitability

th m and utua propeub o m.

To tu owinmut
irdushie ard qenwal
Cost data 4peie
o U n ment o
oosb on inpuente tha

intiate CPpaopoiate chaneges 9nauntig subsidis,

tanatton Polides,Tmpot ad exporta ett
 To Hhu pubbc
Removal owaatages

Fai'v puce oproduels

Enploymut Oppontuitie

To th public
n paopen
CLond Eosbng ystem elp
Cost heoucbion s ulpful
uRGaions esoeces

ah pite bpducli
and
prakitakzi ty o
0ngansaions helpfil n prospeuby bhe
bppotuities
indusbu hiough move
moe employemerd

the monbes el he publ

imitakions eCost Accounting
lad wionity
Second hand data
Conwntis6ns
Unceuta>nty
Applicalilty
Costlu
Somuitems
atk e vrigonmity
Thuu
Thuu no wniormystem o Costihg

applicake do all industies

Even or the
ame
m
at wo
may a
tuo deent Cost aCcount ants

ent CDstiqs

Secoro and dala

Costing dep.ehds bn iancial accourts o

inomatisn ohich ecod hand

a lot
Onwuntons

Sewwal Conentons Ou outire ly Gpplied or

 in
Aed in Cosdv
Cosn wich may hot be apprupnicde
all Suafon

Fon xampe
Vawuiable ad red
clasy ohads into
machine
hou ete
On
ecown owahead

FiranialAccounting
Cosl Aconting
andl Cos Acountirg
ence Bettoeen

Basis Finanial continy Cost ccownti

Tu main objeckie
objechws The main objeciu o
Financial Acounting i to Cost accownti to
Phepau pnopl s los AlC
to
Proude Cunt inpenumation
anol Balanee sheet
Ao manag emant tor
nepont to owres and
outs ide decison makin

eqal inanial eLords a Cost acco wnting au

eauivement maintained as pen tu
maùntained o hulru he
equiremund oComponents
nternal neauirementb
interna Aeauirementb
act Tntom dan act
Cthe manaqement as 0s po
pen
Conuentionel Cuidelinus
 Financial Accocnting Cost AcLountin
Tt clasifes e corels thecods ad avalypes
Caxilcakion ard analyses tbansacliors eperoli tuw n an objed

in a subjecfie mannen-tue mannn vi

Le acLonding do rahue aconding to
pwrpe oT
expenses huch tosts au incuwvcd

Slock Tn firanaa atcowts,

n Lost actomb stoks
Valuation stk a valud at Cost a Valueo at tost
OY 7ealisable value

Analypit The prefit en los of Co actouns neweal

prolpt the entive
nterpniePhoft br los et dliewt
andl Cost
didoed tolo. prolucts derarbmonts
separnately
ACcoutin Financial neporns au
Cost neporbs o
Pericol au

Prepouod annually Conbnuous PYoCess and

Preparud as pr tu
Aeauirenents maragen
enta
may ue dlai ly ov
annuallu