Wednesday, 19th Jun 2013
Nov 25
Job order costing and process costing are the two essential techniques of cost accounting. Job order costing is applied where production is executed under specific orders, based on customers’ requirement. Here each and every job is considered as a cost unit and to some extent the cost centre too. Process costing on the other end, …
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Nov 20
Process costing is a system of costing in which the cost of each process is ascertained and the same is absorbed by the output of that process. It is a product costing system which is applied to manufacturing organizations in producing large quantity of similar products with continuous process. There is no unit with an …
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Nov 20
Contract costing is the method of specific order costing and it is used where work is undertaken according to customer’s special requirements and each order is subject to long term basis. It is a special type of job costing where the unit of cost is treated as a single contract basis. Contract itself is considered …
Permanent link to this article: http://icabtutorial.com/important-key-terms-used-in-contract-costing/
Nov 20
Cost sheet is a statement shows the detailed cost of finished goods during a period. It presents detailed information relating to cost per unit of a product at the different stages of production process. The preparation of cost sheet is one of the important and primary functions of cost accounting. Cost sheet is not an …
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Nov 19
Cost of quality refers to all of the costs associated with making and ensuring high quality finished products. A company may have a product with a high quality and strong brand image that uses superior raw materials along with high quality. But when it produces defective products during the production process, the company has to …
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Nov 17
A comparison between the financial accounting and management accounting may have differences in its respective field. The basic differential points are as follows: In financial accounting, financial statements are mainly meant for outsiders such as shareholders, debenture holders, creditors, and government agency. On the other hand, in management accounting necessary statements are prepared mainly for …
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Nov 15
Fixed Costs: Fixed costs are those costs which do not vary with volume of output and therefore fixed costs are defined in terms of daily, weekly, monthly and even yearly. These remain constant throughout the relevant range. For example if fixed cost of a company is $5000 and company produces whether 10000 units or 20000 units, …
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Nov 06
Perpetual inventory method is a system of accounting for inventory in which detailed records of the number of units and the cost each purchase and sales transactions are prepared on a day-to-day basis. The perpetual inventory system employs accounting records that continuously or perpetually disclose the amount of the inventory on hand. Perpetually updating the inventory …
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Nov 01
Accounts receivable financing also known as factoring is a unique financial innovation. It is both a financial as well as a management support to a client. It is a method of converting a non-productive, inactive asset (for example receivables) in to a productive asset (for example cash for business operation) by selling receivables to a …
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Nov 01
The objectives of accounting for inventories are to determine the appropriate income through the process of matching costs against revenues. The matching principle states that the revenue for the period must be offset by all the expenses incurred in producing that revenue. In most of the companies, the cost of goods sold is the largest …
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