STUDY TO ENLIGHTEN YOURSELF
COST VOLUME PROFIT ANALYSIS Cost Volume‐Profit Analysis is the analysis of three variables viz. Cost, Volume and Profit, which explores the relationship existing amongst Costs, Revenue, Activity Levels and the resulting Profit. The Cost Volume Profit Analysis is also known as Break even Analysis. ACCORDING TO CHARTERED INSTITUTE OF MANAGEMENT ACCOUNTANTS, LONDON “COST VOLUME PROFIT…
APPLICATIONS OF MARGINAL COSTING Marginal costing is a technique of ascertaining cost used in any method of costing. According to this technique, variable costs are charged to cost units and the fixed cost attributable to the relevant period is written off in full against the contribution for that period. Contribution is the difference between sales…
MARGINAL COSTING Marginal Costing is a technique of ascertaining cost used in any method of costing. According to this technique, variable costs are charged to cost units and the fixed cost attributable to the relevant period is written off in full against the contribution for that period. Contribution is the difference between sales value and…
EQUIVALENT PRODUCTION Equivalent Production represents the production of a process in terms of completed units. In other words it means converting the incomplete production units into its equivalent of complete units. In each process an estimate is made of the percentage completion of any work-in-progress. A production schedule and a cost schedule will then be…
BY- PRODUCTS The by products is a secondary product, which incidentally results from the manufacture of a main product. By products are also produced from the same raw material and same process operations but they are secondary results of operation. The main difference between the joint product and byproduct is that there is no intention…
JOINT PRODUCTS Joint products imply that they are produced from the same basic raw material, are comparatively of equal importance, are produced simultaneously by a common process and may require further processing after the point of separation. ACCORDING TO CHARTERED INSTITUTE OF MANAGEMENT ACCOUNTANTS, LONDON “Joint products is two or more products separated in the…
The description of Process Costing and Job Costing is as follows: PROCESS COSTING Process costing is that aspect of operation costing which is used to ascertain the cost of the product at each process or stage of manufacture. This method of accounting used in industries where the process of manufacture is divided into two or…
PROCESS COSTING VS JOB COSTING Process Costing vs Job Costing is as follows: JOB COSTING Job costing or job order costing also called specific order costing is a method of costing which is used when work is undertaken as per the customer’s special requirement (tailor-made). ACCORDING TO INSTITUTE OF COST AND MANAGEMENT ACCOUNTANTS, LONDON “Job…
PROCESS COSTING Process Costing is that aspect of operation costing which is used to ascertain the cost of the product at each process or stage of manufacture. This method of accounting used in industries where the process of manufacture is divided into two or more processes. The objective of process accounting is to find out…
JOB COSTING VS CONTRACT COSTING The difference between Job Costing VS Contract Costing is as follows: BASIS OF DIFFERENCE JOB COSTING CONTRACT COSTING MEANING Job costing is a system used for completion of specific customer orders where each unit produced is considered a job. Contract costing is a costing system where work is undertaken according to…
Read More “DIFFERENCE BETWEEN JOB COSTING AND CONTRACT COSTING” »
