COST ACCOUNTING

Cost Accounting

Cost Accounting

Generally accepted accounting principals (GAAP) is made of financial accounting. Management accounting is for internal purposes and can be flexible to meet needs of organization. Management accounting is done for internal purposes of organization. In general, directors governs only accept transaction systems or accounts that are related to external users, such as financial reporting. In financial accounting, accounts and reports provide financial information to external users. To ensure reliability of financial reporting, GAAP does some rules and principles of financial accounting.

Management accountants are not responsible for statements of financial accounting. Management reports are made, both from that can help internal users. auditors' reports are used internally by management. Reports or financial statements form an informal basis. Management accounting helps management in making decisions. Management decisions are based on information from concepts of cost and cost and cost accounting is the part of management accounting (Management Accounting).

cost objective is the measure of cost of the special purpose. In order to counter it costs the time calculation. Determines result of cost accounting period. Target cost plays an important role in calculation of costs and organizational performance. Represents the special type of accounting or spreadsheet for calculating costs of the company. Target cost accounting split all costs with different elements of the company. Solve problem of cost allocation.

Target cost accounting for all costs divided according to production and manufacturing operations. Each element has the different cost. This is an accounting system that separates cost of various items. It is important for the company to decide an appropriate cost objective as it will provide accurate information to managers so they can make the solid decision for organization. THE cost allocation and process will help reduce cost to company.

Standard cost is the cost predetermined by management. Management decides level of efficient and necessary expenses incurred. Costs used for cost control and pricing using analysis of variance. It is also used for calculation of historical cost can be expensive for an organization. Historical data varies from day to day, so no use of historical data for pricing. Historical data are also not an accurate measure of efficiency.

• cost of aid to pricing.

• Help control costs.

• Provides greater accuracy in costing of the new product.

• Standardization of products.

• It provides the uniform basis for comparison.

• Changing technology affects accuracy of standard costing.

• standard cost may be too liberal or too strict for the ...