Different methods put different impact over the income statement and balance sheet such as: This method focused over selling such items that purchased or produced first also get sold first. The closing inventory amount reflect the amount of recent inventory. If there is rising prices then the closing inventory is having higher cost that results into increase in current assets.
Based on these elements cost can be divided into Product cost and Period cost. Product cost — These are cost of manufacturing the product.
Period cost — These involve the costs apart from the manufacturing cost which are charged to or written off to income statement during different periods.
Direct cost are those which are directly associated with manufacturing of products Tyran, These costs are generally variable costs. Direct cost includes the following: Example, cost incurred on plywood, fabric for textile, wooden battens, steel for almirah etc.
Direct Labour — These are production or service labour that are assigned to a specific production or cost centre. Example, drillers, painters, sawyers, assemblers, etc. These are those expenses which are incurred on a product for either improving their quality or design.
Example, special machinery is bought to upgrade the style of tables and chairs Farr, Indirect Cost-The indirect cost includes the cost which are incurred in the factory but not directly incurred on manufacturing of a product Rouwendal, The indirect cost includes the following: Indirect Material — The costs which have not been included in direct material will come under indirect material.
Indirect Labour — The cost of labour which are indirectly associated with the manufacturing are indirect labour cost.
Indirect Expenses — The indirect expenses mainly involves the factory cost. Example, depreciation on machinery, electricity cost, rent, telephone bill, council tax, insurance, etc.
These basically include the Overhead costs. Period cost-Period cost is the cost that includes Administrative cost, Selling and Distribution cost and Finance cost.
Administrative cost — These are the cost which includes the administrative expenses of the organization. The administrative cost includes salaries of employees, office rent, Council tax, water cost, telephone bill, etc Farr, Selling and Distribution cost — These are the costs incurred for making products qualify for selling and several distribution activities undertaken.
These cost includes cost of advertising, market research, survey, salaries, bonus, etc. Finance cost — These costs are those which are associated with permanent, long-term and short-term finance.
This cost includes dividend, interest, long term and short term loans, etc. Cost can be further classified on the following basis: Based on behaviour the costs are divided into 3 types they are fixed cost, variable cost, and semi variable cost.
The cost that remains constant even if the activities of business changes. It does not have any effect on production level Underwood, These are costs which will vary according to the production level of the Buccaneers Ltd Czopek, The costs which have both the characteristics like fixed and variable costs.
Based on controllability the costs are divided into 2 types one is controllable which is controllable by the business management and another which is not controllable by the management.
Based on timing the costs are classified into 2 types one is historical costs and Predetermined cost. The cost which is prepared in past and followed by present. The cost which is prepared in advance for future purpose Rouwendal, In order to run the business successfully in typical situations.
They are as follows: This method is followed by the industry having different types of jobs and cost of each job can be calculated by this method. For example, a builder who provides service to householders, factory owner, shop owner, etc Lucey, This method is used to calculate the cost of specific venture or contract like cost incurred in building bridges, buildings etc.
This method is used by the organization which follows different process in order to make the finished products. For example in textile industries to make finished product cloth they follow different process like spinning, weaving, colouring, folding etc. This method is suitable for the service oriented business.
For this separate costing method is formulated for the benefits of the service organization Baum, In case of Buccaneers Ltd.This unit provides the learner with the skills to apply management accounting techniques relevant to operations management in an organisational context, including forecasting, capital appraisal, budgeting, cost control and analysis.
Business assignment help offered by business professionals, this Unit 9 Management Accounting Costing and Budgeting Assignment is part of business course. Management Accounting Costing And Budgeting,This unit looks at the cost information, both current and future, of businesses.
It looks at how cost data is collected, compiled and analysed, and processed into information that is useful for business managers.
Learners will have the opportunity to apply these principles.
Accounting is a key success of a business, but the word accounting is more sophisticated. Costing and Budgeting Case Study. Print Reference this. Published: 23rd March, Last Edited: 24th April, In the management accounting there are different ways to collect data for the business.
Standard Costing and Budgeting is one of the subject in which we provide homework and assignment help. Whether your problem is related to Managerial, Cost, Activity based or financial accounting, We provide a systematic way of looking at events, collecting data, analyzing information, and reporting the results.
Interpretation. Unit cost of production of product is and this is calculated by using direct material and labor cost. After that fixed and variable expenses are also computed and added to the direct costs in order to compute aggregate cost of production. Unit 9 management accounting costing and budgeting assignment helps you in providing an in-depth knowledge about different costs involved in a running business. By going through this, students will able to know what are the tools or techniques followed by the business to analyze the cost and prepare the cost reports of the organization. Global Assignment Help provides free assignment sample on Management Accounting written by highly qualified writers for University students to excel in academics.
We have 24 / 7 live online tutors . Management Accounting Costing And Budgeting,This unit looks at the cost information, both current and future, of businesses. It looks at how cost data is collected, compiled and analysed, and processed into information that is useful for business managers.