PRESENTATION ON COST

ACCOUNTING

TOPICS: COST ACCOUNTING VS FINANCIAL

ACCOUNTING, MANAGEMENT ACCOUNTING , COST
UNIT, COST CENTRES AND PROFIT CENTRE
PRESENTED BY:
PHIDARI
MILDALIN
SYNSHAR
SAMKUPAR
GARMON
DOLFIE
COST ACCOUNTING VS FINANCIAL
ACCOUNTING

COST ACCOUNTING

Meaning
Cost Accounting is the classifying, recording and appropriate allocation of expenditure for the
determination of costs of products and services. It includes the ascertainment of the cost of
every order, job, contract, process, service or unit as may be appropriate. It deals with the cost of
production, selling and distribution.

Functions
• It serves as a guide for price fixing of a product.
• It discloses the sources of wastage in process of production.
• It find the ways of economy (cost reduction) in production ways.
FINANCIAL ACCOUNTING
Meaning
Financial accounting is the process of preparing statements that companies use to shows their
financial performance and position of people outside the company, including investor , creditor supplier
and customers.

Functions
• Systematic recording.
• Analyzing and summarizing.
• Communicates results.
DIFFERENCE BETWEEN COST ACCOUNTING
AND FINANCIAL ACCOUNTING
COST ACCOUNTING VS MANAGEMENT
ACCOUNTING

COST ACCOUNTING
Meaning
Cost Accounting is the classifying, recording and appropriate allocation of expenditure for the
determination of costs of products and services. It includes the ascertainment of the cost of every
order, job, contract, process, service or unit as may be appropriate. It deals with the cost of
production, selling and distribution.

Functions
• Ascertainment of cost
• Controlling cost
• Aid to management
MANAGEMENT ACCOUNTING

Meaning
Management Accounting is the presentation of accounting information in such a way so as to
assist management in the creation of policy and the day-to-day operation of an undertaking. Thus, it
relates to the use of accounting data collected with the help of financial accounting and cost
accounting for the purpose of policy formulation, planning, control and decision-making by
management.

Functions
• Provides data
• Modifies data
• Communication
DIFFERENCE BETWEEN COST ACCOUNTING AND
MANAGEMENT ACCOUNTING
 UNIT COST
Unit cost is the total expenditures incurred by a company to produced, store and sell one of a
particular product or service.

Types of Unit Cost Formula:-

• Single cost unit
• Composite cost unit

Keys
• It helps to measure how much the expenditure to produce a product or service.
• Detect errors.
• Increases productivity.
COST CENTRE
Cost centre is a role of a small section/department within the firm that supervises all costs of the company.

Types of Cost Centre Formula:

• Impersonal cost centre
• Personal cost centre
• Operational cost centre
• Process cost centre
• Services cost centre
• Product cost centre
Keys
• It helps in creation of responsibilities centre.
• It increases the operational efficiency.
• It reports.
PROFIT CENTER

• A profit center is a branch or division of a company that directly adds or is expected to add to the
entire organization's bottom line. It is treated as a separate, standalone business, responsible for
generating its revenues and earnings.
Importance
• Focus on each units
• Easier to identify cost and take decision
• Share holders can track performance
• Identification between actual and budgeted
Types
• Departments in Organization
• Strategic units in Big Organization
Conclusion
And here we observed and conclude that a system of recording and analyzing
the cost of products or services, helps an enterprise to conduct its day-to-day
activities smoothly and also helps in its future growth.
REFERENCES

• Difference between cost accounting and financial accounting, Difference between cost accounting and
management accounting .
By DR. ABBAS VATTOLI
• Cost Accounting
By S.P Jain and K.L Narang