what is a cost accounting?

Answer 1

its a very long, arduous class that really is very little fun. skip class today.

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see the rest of the comments? i told you...

Answer 2

Cost Accounting Answers

Answer 3

Cost Accounting is a branch of accounting that serves as a bridge between managerial and financial accounting by means of providing information upon the external users and internal users .
These tackles different topics regarding Product Cost and how to distinguish the upstreams and downstream costs.Hope this help

Answer 4

Cost accounting is that part of the accounting function that answers the questions dealing with cost of a product. Cost accounting is found mostly in manufacturing companies. The three components of cost are direct materials, direct labor and indirect costs. Direct materials are those raw materials used to build the final product. Direct Labor is the paryroll paid to production staff that built the product; those that actually touched the product. And indirect costs include such things as rent/lease expense for the production area, utilities paid for the production area, vacation/sick/holiday pay to the direct laborers, shop supplies such as drill bits and saw blades used in production, and depreciation expense of the equipment used in the production of your product.

Answer 5

1. The process of identifying and evaluating production costs.

2. Accounting system allocating direct and indirect costs of bank services to various departmental units. Internal cost accounting considers various factors in pricing bank services, and typically includes the following: overhead, including building rent, utilities, administrative support, and executive salaries; selling costs, which include advertising, promotional expenses, and salaries of account executives and branch employees; and interest cost, or the cost of acquiring funds for lending or investing. Some bank expenses have fixed costs that remain more or less constant, such as employee salaries and rent; others have variable costs and are volume sensitive.

The Marginal Cost of Funds measures the cost of expanding deposits at the margin, that is the cost of one additional dollar unit of deposit or loan volume. Fully absorbed costing takes into consideration both interest expense and noninterest expenses, such as rent, insurance, and taxes, and frequently it is the basis of pricing banking services. A bank carries out a cost analysis of the product or service being considered and determines the yield required to meet its required return. Fully absorbed costing, also called cost plus pricing, often disadvantageously ignores customer demands and competitive pricing by other financial institutions.

3. An accounting method which allows for additional depreciation on some part of the difference between a depreciable asset’s original cost and its replacement cost.

4. Cost accounting is the process of tracking, recording and analyzing costs associated with the products or activities of an organization. In modern accounting, costs are measured in accordance with Generally Accepted Accounting Principles (GAAP). GAAP reporting records historical events and assigns a monetary value to each event that has taken place. Costs are measured in units of currency by convention. Cost accounting could also be defined as a kind of management accounting that translates the Supply Chain (the series of events in the production process that, in concert, result in a product) into financial values. Managers use cost accounting to support decision making to reduce a company's costs and improve its profitability.

There are at least four approaches:
•Standard Cost Accounting
•Activity-based Costing
•Throughput Accounting
•Marginal Costing

Cost accounting has long been used to help managers understand the costs of running a business. Modern cost accounting originated during the industrial revolution, when the complexities of running a large scale business led to the development of systems for recording and tracking costs to help business owners and managers make decisions.

In the early industrial age, most of the costs incurred by a business were what modern accountants call "variable costs" because they varied directly with the amount of production. Money was spent on labor, raw materials, power to run a factory, etc. in direct proportion to production. Managers could simply total the variable costs for a product and use this as a rough guide for decision-making.

Some costs tend to remain the same even during busy periods, unlike variable costs which rise and fall with volume of work. Over time, the importance of these "fixed costs" has become more important to managers. Examples of fixed costs include the depreciation of plant and equipment, and the cost of departments such as maintenance, tooling, production control, purchasing, quality control, storage and handling, plant supervision and engineering. In the early twentieth century, these costs were of little importance to most businesses. However, in the twenty-first century, these costs are often more important than the variable cost of a product, and allocating them to a broad range of products can lead to bad decision making. Managers must understand fixed costs in order to make decisions about products and pricing.

For example: A company produced railway coaches and had only one product. To make each coach, the company needed to purchase $60 of raw materials and components, and pay 6 laborers $40 each. Therefore, total variable cost for each coach was $300. Knowing that making a coach required spending $300, managers knew they couldn't sell below that price without losing money on each coach. Any price above $300 became a contribution to the fixed costs of the company. If the fixed costs were, say, $1000 per month for rent, insurance and owner's salary, the company could therefore sell 5 coaches per month for a total of $3000 (priced at $600 each), or 10 coaches for a total of $4500 (priced at $450 each), and make a profit of $500 in both cases.