Are you a student of management or pursuing an MBA as your degree course? Then you must know about the different factors of it. There are many terms that are used in business management which are sometimes typical to understand. They are of high value, once you understand their basic concept then there is no going back. One of the important concepts in Cost accounting. It helps you to manage the cost of production of a company.
You can learn this concept in your lectures, and if you have missed its classes or you didn’t understand then you can read this article till the end. This consists of the basic concepts of cost accounting such as its definition and types. There are times when you are not able to do your assignments and there can be different reasons for that like not having good enough writing skills or deep knowledge about the subject. You can take MBA assignment help and let the expert writers do your assignment.
Definition of Cost Accounting
You can understand cost accounting in a way that manages all the accounting for a company. It takes command of the company’s complete cost of production by calculating the variable costs at every step of the production and also the fixed costs like leases. In short, it can be said that cost accounting includes all the input costs. It is used by the management team to take important business decisions which should be fully informed. In financial accounting, the information is provided to the users as a financial statement. One more thing to keep in mind while learning about cost accounting is that it cannot be used on official statements. It is not a GAAP complaint, the full form of GAAP is Generally accepted by accounting principles. Cost accounting includes many types of costs, some of which are given below:
Operating costs: These include the costs of daily operations of a business.
Variable costs: These include the costs of the company’s cost of production. For example, more flowers are bought for the valentine’s day arrangement.
Direct costs: It is the cost that is directly used to produce a product.
Fixed costs: This cost is that which does not change on the level of the production of goods in the company.
Indirect costs: These include the costs which are not directly related to the cost of the products.
Types of Cost Accounting
There are many types of cost accounting which include different aspects of it. Writers of Marketing assignment help can provide detailed information about the types and examples explaining all that because they have expertise in the subjects.
1. Lean cost accounting: This accounting type is adopted to improve the management of the finances in the company. It is an extended version of the philosophy that works on lean manufacturing and lean production. It cut down the cost of waste materials and optimizes productivity.
2. Activity-based cost accounting: This accounting is based on the different activities and the costs of each department. The cost is produced from the activities like setting up the machines, designing the products, etc.
3. Standard cost accounting: It includes the standard cost of the product rather than the actual cost. It is the cost of goods that are sold and the inventory involved. The standard cost includes all the costs whether they are small or big such as the efficient use of labor and the cost of materials to produce goods and services.
4. Marginal cost accounting: The other name for marginal cost accounting is cost volume profit analysis. It analysis the impact on the cost of the product or service when compares to the profit they are making. It takes account of all the margins.
Examples of different types of Cost Accounting
To make you understand the types of cost accounting much better, here we are with some examples.
1. Here is the example of standard cost accounting, if a company is targeted to produce 500 pieces of some product but due for whatsoever reason it ended up producing 600 pieces, then it is going to affect the total cost of producing goods.
2. While doing the activity-based cost accounting, the employees do a survey in which they have mentioned the amount of time they have spent and where. In this, the cost of each activity is mentioned which makes it easier for the management to know where the time and money have been spent.
3. If the Lean accounting department finds out ways to cut down the wasted time then the employees can focus the remaining saved time on the development of other products or can do value-added tasks for the company.
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1. What is the reason for using cost accounting?
Ans. It takes all the responsibility of telling you the money that is being spent in a company. It tells the data of how much it earns, how much it spends, and how much is getting lost.
2. Can you provide instant assignment help for the assignments?
Ans. Yes, we have writers who can do your assignments in considerably less amount of time. You can get these services if you need to get the work done urgently.
3. Is it important to learn about cost accounting?
Ans. Yes, learning the concepts of cost accounting can be very useful for a student. It can save many troubles in the future otherwise they can also consider business management writing services when they have asked to do the assignments.