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    Introduction To Cost Accounting

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    april
    Controlling is the process of determining whether planned goals are being met. TRUE

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    Introduction To Cost Accounting

    Uploaded by

    april
    9 views12 pages
    Controlling is the process of determining whether planned goals are being met. TRUE

    Original Title

    1. INTRODUCTION TO COST ACCOUNTING

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    Controlling is the process of determining whether planned goals are being met. TRUE

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    9 views12 pages

    Introduction To Cost Accounting

    Uploaded by

    april
    Controlling is the process of determining whether planned goals are being met. TRUE

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    of 12

    INTRODUCTION TO COST

    ACCOUNTING
    Cost Accounting
    • Cost Accounting is an expanded phase of general or financial accounting which informs management
    promptly with the cost of rendering a particular service, buying and selling a product, and producing a
    product.
    • All types of business entities - manufacturing, merchandising, and service businesses - require information
    systems which provide the necessary financial data.
    • In order to, appreciate .the importance of an efficient cost system, it is necessary to understand the nature of
    the manufacturing process.
    • In many ways, the activities of a manufacturing organization are similar to those of a merchandising
    business. Both are concerned with purchasing, storing, and selling goods; both must have efficient
    management and adequate sources of capital; both may employ hundreds or thousands of workers.
    Comparison of Financial, Managerial, and Cost Accounting
    Financial accounting is the use of accounting information for reporting to external parties,
    including investors and creditors. Financial accounting is primarily concerned with financial
    statements for external use by those who supply funds to the entity and other persons who
    may have vested interest in the financial operations of the firm
    Managerial accounting focuses on the needs of parties within the organization, rather than
    interested parties outside the organization. Managerial accounting information commonly
    addresses individual or divisional concerns rather than those of the enterprise as a whole
    Cost accounting is the intersection between financial and managerial accounting. Cost
    accounting information is needed and used by both financial and managerial accounting
    Merchandising versus Manufacturing Operations
    A merchandising company normally buys a product that is ready for resale when it is received. Nothing
    needs to be done to the product to make it salable except possibly to prepare a special package or display.

    Beginning merchandise inventory xx


    Plus: Total purchases xx
    Cost of goods available for sale xx
    Less: Ending merchandise inventory Cost of goods sold (xx)
    Cost of goods sold xx
    Uses of Cost Accounting Data
    Determining Product Costs
    Determining the selling price of a product
    Meeting competition
    Bidding on contracts
    Analyzing profitability

    Planning and Control


    Strategic planning
    Tactical planning
    Operations planning
    Two Basic Product-Costing System
    1. Job order costing –system for allocating costs to group of
    unique product

    2. Process costing –system applicable to a continuous process of


    production of the same or similar goods
    Two Basic Product-Costing System
    RECITATION
    Question #1
    TRUE OR FALSE

    Reports prepared in financial accounting are general-purpose


    reports, whereas reports prepared in managerial accounting
    are usually special purpose reports

    TRUE
    Question #2
    TRUE OR FALSE

    Management accounting applies to all forms of business


    organizations

    TRUE
    Question #3
    TRUE OR FALSE

    Process costing is used by companies making one-of-a-kind


    products

    FALSE
    Question #4
    TRUE OR FALSE

    Controlling is the process of determining whether planned


    goals are being met

    FALSE

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