introduction to
play

Introduction to Cost Accounting Dr. Varadraj Bapat Indian Institute - PowerPoint PPT Presentation

Apr 13, 2023 •740 likes •1.32k views

Introduction to Cost Accounting Dr. Varadraj Bapat Indian Institute of Technology, Mumbai varadraj@som.iitb.ac.in 1 9892413119 Dr. Varadraj Bapat CA., CWA., M.Com., DISA, PhD. School of Management Indian Institute of Technology,

  1. Introduction to Cost Accounting Dr. Varadraj Bapat Indian Institute of Technology, Mumbai varadraj@som.iitb.ac.in 1 9892413119

  2. Dr. Varadraj Bapat  CA., CWA., M.Com., DISA, PhD. School of Management  Indian Institute of Technology, Mumbai  Teaching Interests: Financial Accounting, Management Accounting, Indian Economy  Research Interests: Financial Accounting, Financial Inclusion, Corporate Finance  Others: Yoga, Spirituality, Sanskrut, Bharatiya Sanskriti, ABVP

  3. Cost Accounting Cost Accounting Cost Classification of Cost Product Cost Period Cost 3

  4. S TREAMS OF A CCOUNTING  Financial Accounting, Cost Accounting and Management Accounting  the similarities and difference in these three streams of accounting

  5. F INANCIAL A CCOUNTING  Recording of Financial Transactions  Summerising  Reporting - Preparation of Financial Statements  Targeted to External Users

  6. C OST A CCOUNTING  Recording of Costs  Analysis of Costs  Preparation of Cost Statements  Targeted to Internal Users

  7. M ANAGEMENT A CCOUNTING  Recording of Financial & other data  Analysis of Financial and other information  Preparation of Statements for Managerial Decisions

  8. Cost Accounting Dr. Varadraj Bapat, IIT Mumbai Cost accounting involves recording, controlling estimating and reporting for costs. 8

  9. Cost Accounting Dr. Varadraj Bapat, IIT Mumbai Cost accounting process begins with the recording of expenditure or the bases on which they are calculated and ends with the preparation of statements for ascertaining and controlling costs. 9

  10. Objectives: Dr. Varadraj Bapat, IIT Mumbai The main objectives of Cost Accounting are as follows: 1. Ascertainment of cost 2. Cost control and cost reduction 10

  11. Cost Accounting Objectives: Dr. Varadraj Bapat, IIT Mumbai 3. Assisting management in decision-making including pricing, profit planning, budgeting 11

  12. Advantages 1. Helps in identifying Dr. Varadraj Bapat, IIT Mumbai unprofitable activities, losses or inefficiencies in any form. 2. Application of cost reduction techniques, operation research techniques and value analysis technique 12

  13. COST Anything incurred during the production of the good or Dr. Varadraj Bapat, IIT Mumbai service to get the output into the hands of the customer. 13 Factory Production Consumer

  14. WHAT IS COST? Dr. Varadraj Bapat, IIT Mumbai A cost can be defined as the amount of resources given up in exchange for any goods or service . 14

  15. COST e.g. Material cost, Labour cost, Dr. Varadraj Bapat, IIT Mumbai electricity cost, fuel cost etc. 15

  16. COST Capitalised Cost: The cost incurred on fixed Dr. Varadraj Bapat, IIT Mumbai assets are capitalised cost. E.g. cost incurred to purchase machineries. These cost are not covered here, except which is subsequently treated as expenses (depreciation). 16

  17. Cost Classification • By elements • By function Dr. Varadraj Bapat, IIT Mumbai • As direct and indirect • By controllability • By normality • By variability • By relevance 17

  18. By Nature or Element Dr. Varadraj Bapat, IIT Mumbai Under this classification the costs are divided into three categories i.e. material cost, labour cost and expenses. 18

  19. ELEMENTS OF COST Dr. Varadraj Bapat, IIT Mumbai Material Expenses Labour 19

  20. Dr. Varadraj Bapat, IIT Mumbai Material The cost which is incurred on physical substance or thing. e.g. Components or raw materials purchased 20

  21. Dr. Varadraj Bapat, IIT Mumbai Labour The cost incurred on human efforts. e.g. ?? 21

  22. Dr. Varadraj Bapat, IIT Mumbai Labour The cost incurred on human efforts. e.g. Salary, Wages, Bonus, Incentives, Retirement Benefits, Perquisites 22

  23. Expenses Dr. Varadraj Bapat, IIT Mumbai The cost incurred for services. Expenses are other than material and labour are covered here. e.g. ?? 23

  24. Expenses Dr. Varadraj Bapat, IIT Mumbai The cost incurred for services. Expenses are other than material and labour are covered here. e.g. Electricity expenses, Rent, Telephone 24

  25. By Function Dr. Varadraj Bapat, IIT Mumbai In this classification costs are divided according to the function for which they have been incurred. They include ?? 25

  26. By Function Dr. Varadraj Bapat, IIT Mumbai In this classification costs are divided according to the function for which they have been incurred. E.g. production cost, office & administration cost, selling & 26 distribution costs

  27. By Function Dr. Varadraj Bapat, IIT Mumbai Production cost: materials, direct labour, stores overheads etc. Office & administration cost: cost of formulating policy, directing the organisation and controlling the operations. E.g ?? 27

  28. By Function Dr. Varadraj Bapat, IIT Mumbai Selling and distribution expenses or marketing cost: expenditure incurred generating demand, on moving articles to prospective customers etc. 28

  29. DIRECT COST Dr. Varadraj Bapat, IIT Mumbai Direct costs are costs which can be easily attributed to a particular cost center/ product. e.g.- the cost of hard disks while assembling an PC. 29

  30. INDIRECT COST Dr. Varadraj Bapat, IIT Mumbai Cost that must be allocated in order to be assigned to a product or department. This cannot be assigned directly to any particular cost centre. e.g. ?? 30

  31. INDIRECT COST Dr. Varadraj Bapat, IIT Mumbai Eg. Costs incurred by the computer maintenance and support group, wages paid to security staff, storage cost of units produced. 31

  32. By Variability Dr. Varadraj Bapat, IIT Mumbai According to variability classification cost are classified into three groups viz. fixed, variable and semi- variable. 32

  33. VARIABLE COST Variable Costs are those costs Dr. Varadraj Bapat, IIT Mumbai that vary directly and proportionately with the output. There is a constant ratio between the change in cost and change in the level of output. Examples 33

  34. VARIABLE COST Dr. Varadraj Bapat, IIT Mumbai Examples of variable cost are direct wages, direct material, Petrol cost for vehicle. 34

  35. FIXED COST Dr. Varadraj Bapat, IIT Mumbai Fixed Cost is a cost which does not change in total for a given time period despite wide fluctuations in output or volume of activity. Examples 35

  36. FIXED COST Dr. Varadraj Bapat, IIT Mumbai Fixed Cost Examples are rent, property, taxes 36

  37. FIXED AND VARIABLE COSTS FIXED AND VARIABLE COSTS Cost In Total Per Unit Variable Changes as Remains activity level constant Dr. Varadraj Bapat, IIT Mumbai increases. as activity level increases Fixed Remains Reduces constant as as Activity activity level level 37 increases increases

  38. Semi-variable Cost Dr. Varadraj Bapat, IIT Mumbai These costs contain both fixed and variable components and thus partly affected by fluctuation in the level of activity. Examples 38

  39. Semi-variable Cost Dr. Varadraj Bapat, IIT Mumbai Examples of semi variable costs are telephone bill, electricity, Maintenance. 39

  40. Example A company has prepared budget for July and Aug 2013. Dr. Varadraj Bapat, IIT Mumbai 1000 2000 Particulars Units Units Direct Material 50000 100000 Direct Labour 28000 56000 Rent of the factory 75000 75000 Power 35000 50000 Maintenance 17000 26000 40

  41. By Controllability Costs here may be classified as Dr. Varadraj Bapat, IIT Mumbai controllable and un- controllable cost. Controllable costs are the cost which can be influenced by an action of the specified member of the undertaking. Uncontrollable cost are those which are not controllable. 41

  42. By Controllability The distinction between controllable Dr. Varadraj Bapat, IIT Mumbai and uncontrollable costs is not very sharp. Infact no cost is uncontrollable; it is only in relation to a particular individual that we may specify a particular to be either controllable or uncontrollable. 42

  43. By Controllability Dr. Varadraj Bapat, IIT Mumbai For example, expenditure incurred by tool room is controllable by foreman in- charge of that section but share which is apportioned to machine shop can not to be controlled by machine shop foreman. 43

  44. By Normality According to this basis cost may be categorized as normal Cost Dr. Varadraj Bapat, IIT Mumbai and abnormal cost. Normal cost is normally incurred at a given level of output under the conditions in which that level of output is normally attained. 44

  45. By Normality And cost which is abnormally incurred is called as abnormal Dr. Varadraj Bapat, IIT Mumbai cost. e.g. cost of material which is evaporated is normal loss where as goods lost by fire or theft is treated as abnormal loss. 45

  46. By relevance Relevant costs are those future Dr. Varadraj Bapat, IIT Mumbai costs which differ between alternatives. Relevant costs may also be defined as the cost which are affected and changed by a decision. 46

  47. By relevance Sunk costs are all costs incurred in the past that cannot be Dr. Varadraj Bapat, IIT Mumbai changed by any decision made now or in the future. Sunk costs should not be considered in decisions. e.g. cost incurred on research of a product will be irrelevant while 47

Recommend

INTRODUCTION INTRODUCTION INTRODUCTION INTRODUCTION INTRODUCTION INTRODUCTION INTRODUCTION

INTRODUCTION INTRODUCTION INTRODUCTION INTRODUCTION INTRODUCTION INTRODUCTION INTRODUCTION

TRAINING COURSE ON SOCIAL PROTECTION & FORMALIZATION TRINIDAD AND TOBAGO MARCH 15, 2017 INTRODUCTION INTRODUCTION INTRODUCTION INTRODUCTION INTRODUCTION INTRODUCTION INTRODUCTION INTRODUCTION Design of the NIS Assistance from the

547 views • 23 slides
INTRODUCTION Introduction 2/42 INTRODUCTION Alternations I am giving bread to the

INTRODUCTION Introduction 2/42 INTRODUCTION Alternations I am giving bread to the

Patterns of variation in the expression of case and agreement Andrs Brny Leiden University Centre for Linguistics 9 November 2019, BaSIS Workshop a.barany@hum.leidenuniv.nl INTRODUCTION Introduction 2/42 INTRODUCTION

1.37k views • 42 slides
Introduction Introduction Introduction Introduction Outline Motivation Failures

Introduction Introduction Introduction Introduction Outline Motivation Failures

Introduction Introduction Introduction Introduction Outline Motivation Failures Definition and concepts Process and product properties Principles SE Approaches Motivation Software and the economy The economies of

1.03k views • 49 slides
Introduction Introduction Introduction Nationwide Cause for Concern 1

Introduction Introduction Introduction Nationwide Cause for Concern 1

Introduction Introduction Introduction Nationwide Cause for Concern 1 https://www.cdc.gov/std/stats17/infographic.htm Introduction Epidemiology in Western Colorado CPHE Surveillance Data Report, May 2018 Chlamydia Epidemiology in Western

977 views • 39 slides
DAQ introduction Purpose of this talk : (1) Introduction for those who have not been in every

DAQ introduction Purpose of this talk : (1) Introduction for those who have not been in every

DAQ introduction Purpose of this talk : (1) Introduction for those who have not been in every meeting (2) Some ideas of diagrams for section 7.1 (Introduction) of TP. Giles Barr 25 Jan 2018, Pembroke College On DUNE, the reality is there is a

474 views • 10 slides
INTRODUCTION cf. Schneider, Chapter 1 INTRODUCTION THEY ARE OUT TO GET YOU INTRODUCTION WHAT

INTRODUCTION cf. Schneider, Chapter 1 INTRODUCTION THEY ARE OUT TO GET YOU INTRODUCTION WHAT

ADVANCED COMPUTER SECURITY INTRODUCTION cf. Schneider, Chapter 1 INTRODUCTION THEY ARE OUT TO GET YOU INTRODUCTION WHAT IS SECURITY? A systems security policies describe What the system is supposed to do Store and provide access

479 views • 16 slides
Overview Introduction to SMIL Introduction to W3C and XML Introduction to SMIL

Overview Introduction to SMIL Introduction to W3C and XML Introduction to SMIL

Overview Introduction to SMIL Introduction to W3C and XML Introduction to SMIL Writing a SMIL file Adding Media Objects Martin Halvey Clipping media files January 2008 Timing and Synchronising Layout World Wide

387 views • 14 slides
14 Introduction Introduction Bad guys can put malware into Example: hosts

14 Introduction Introduction Bad guys can put malware into Example: hosts

Introduction Introduction source Encapsulation ISO/OSI reference model message M application segment H t H t M transport network datagram H n H n H t M presentation: allow applications to frame link H l H n H t M interpret

583 views • 4 slides
Previous Lecture Introduction to SMIL 2 Introduction to W3C and XML Introduction to SMIL

Previous Lecture Introduction to SMIL 2 Introduction to W3C and XML Introduction to SMIL

Previous Lecture Introduction to SMIL 2 Introduction to W3C and XML Introduction to SMIL Writing a SMIL file Adding Media Objects Martin Halvey Clipping media files January 2008 Timing and Synchronising Layout

322 views • 8 slides
Lecture 1 Andreas Habegger Introduction Zynq Introduction Zynq Introduction Zynq PS vs. PL

Lecture 1 Andreas Habegger Introduction Zynq Introduction Zynq Introduction Zynq PS vs. PL

Introduction Zynq Lecture 1 Andreas Habegger Introduction Zynq Introduction Zynq Introduction Zynq PS vs. PL Processing System Processor Peripherals Data Buses AXI Bus Conclusion BTE5380 - Embedded Systems Octobre 2014 Andreas Habegger

1.81k views • 30 slides
2018.06 01 SMILE5 Introduction S E 5 02 Alpha Cloud M I L 03 Company Introduction 04

2018.06 01 SMILE5 Introduction S E 5 02 Alpha Cloud M I L 03 Company Introduction 04

2018.06 01 SMILE5 Introduction S E 5 02 Alpha Cloud M I L 03 Company Introduction 04 Project References S E 5 PART.1 SMILE5 Introduction M I L Introduction STORION-SMILE5 Residential Energy Storage System Inverter 5kW Output Input

1.06k views • 25 slides
Introduction to CICS Course introduction Course introduction What is CICS? What is an

Introduction to CICS Course introduction Course introduction What is CICS? What is an

Introduction to CICS Course introduction Course introduction What is CICS? What is an application server? Why use an application server? Course introduction Services provided by CICS How CICS applications are defined Scaling CICS to meet

1.84k views • 146 slides
Network Visualization Introduction Presented by Shahed Introduction Introduction Basic

Network Visualization Introduction Presented by Shahed Introduction Introduction Basic

Network Visualization Introduction Presented by Shahed Introduction Introduction Basic building blocks Node Links (relationship between nodes) Spatial information Network data

584 views • 9 slides
Introduction Introduction (1) Main argument of the paper: universities are not only

Introduction Introduction (1) Main argument of the paper: universities are not only

Le jugement des pairs comme outil de management des universits Peer-review as a management tool Christine Musselin (CSO, Sciences Po et CNRS) Avril 2013, Lirrsistible ascension du capitalisme acadmique Introduction Introduction (1)

590 views • 28 slides
Introduction Introduction to storage and to storage and filesystems filesystems Introduction

Introduction Introduction to storage and to storage and filesystems filesystems Introduction

Moreno Baricevic Gilberto Daz Axel Kohlmeyer Stefano Cozzini ULA ICTP CNR-IOM DEMOCRITOS Merida, VENEZUELA Trieste, ITALY Trieste, ITALY Introduction Introduction to storage and to storage and filesystems filesystems Introduction

1.19k views • 51 slides
JABLOTRON JA-100 introduction November 2011 Introduction Todays goals First introduction of

JABLOTRON JA-100 introduction November 2011 Introduction Todays goals First introduction of

JABLOTRON JA-100 introduction November 2011 Introduction Todays goals First introduction of the brand new JA-100 alarm system Visions Basic architecture System components Setting Help us with final validations You are the FIRST ones

1.69k views • 111 slides
1 Introduction Introduction Communication System Baseband an adjective that describes

1 Introduction Introduction Communication System Baseband an adjective that describes

Introduction Introduction Physical Layer Mobile network Global ISP Provides the means to transmit bits Basic Concepts of from sender to receiver, Data Transmission Defines the mechanical, electrical, and Home network timing

463 views • 7 slides
Welcome! Todays Agenda: Topic Introduction Course Introduction Team Practical

Welcome! Todays Agenda: Topic Introduction Course Introduction Team Practical

INFOGR Computer Graphics Jacco Bikker - April-July 2015 - Lecture 1: Introduction Welcome! Todays Agenda: Topic Introduction Course Introduction Team Practical Details Assignments Field Study State of

869 views • 62 slides
Introduction (00) RNDr. Martin Madaras, PhD. madaras@skeletex.xyz Introduction Introduction

Introduction (00) RNDr. Martin Madaras, PhD. madaras@skeletex.xyz Introduction Introduction

Virtual and Augmented Reality Introduction (00) RNDr. Martin Madaras, PhD. madaras@skeletex.xyz Introduction Introduction Who am I? What do I do here? 2 About me Short research bio: - 2014 - finished PhD at FMFI UK - 2014 2016 -

1.3k views • 39 slides
PRESENTATION The Introduction What is the Introduction ? The introduction prepares the audience

PRESENTATION The Introduction What is the Introduction ? The introduction prepares the audience

PRESENTATION The Introduction What is the Introduction ? The introduction prepares the audience for your presentation. It tells them what your presentation is about, why it is important, and finally, what to listen for in your speech. Get the

505 views • 3 slides
How to make a presentation with L A T EX? Introduction to L A T EX Introduction to Beamer

How to make a presentation with L A T EX? Introduction to L A T EX Introduction to Beamer

Introduction to Beamer Hafida Benhidour How to make a presentation with L A T EX? Introduction to L A T EX Introduction to Beamer Introduction to Beamer Hafida Benhidour Department of computer science King Saud University November

732 views • 49 slides
Shenzhen Cuilu jewelry Co., Ltd was founded in 1996 and its a large private enterprise

Shenzhen Cuilu jewelry Co., Ltd was founded in 1996 and its a large private enterprise

Introduction Introduction - - Brief Brief Introduction Introduction of of Cuilu Cuilu Group Group Introduction Introduction - - Brief Brief Introduction Introduction of of Cuilu Cuilu Group Group Shenzhen Cuilu jewelry Co., Ltd

147 views • 14 slides
Introduction to ICS- -214 214 Introduction to ICS Official Unit / Incident Log - A V-C-N.org

Introduction to ICS- -214 214 Introduction to ICS Official Unit / Incident Log - A V-C-N.org

V olunteer C ommunications N etwork (V-C-N.org) Introduction to ICS- -214 214 Introduction to ICS Official Unit / Incident Log - A V-C-N.org Academy Course - 2012-02.24-2208 262: Introduction to ICS-214 : V-C-N.org : Slide: 1 V olunteer C

735 views • 34 slides
Introduction to ICS- -214 214 Introduction to ICS Official Unit / Incident Log - A V-C-N.org

Introduction to ICS- -214 214 Introduction to ICS Official Unit / Incident Log - A V-C-N.org

V olunteer C ommunications N etwork (V-C-N.org) Introduction to ICS- -214 214 Introduction to ICS Official Unit / Incident Log - A V-C-N.org Academy Course - 2012-02.24-2208 262: Introduction to ICS-214 : V-C-N.org : Slide: 1 V olunteer C

558 views • 18 slides

More recommend