Quick Answer: Which Of The Following Are The Essentials Of Cost Accounting System?

What are the elements of cost?

Elements of CostDirect Material.

It represents the raw material or goods necessary to produce or manufacture a product.

Indirect Material.

It refers to the material which we require to produce a product but is not directly identifiable.

Direct Labour.

Indirect Labour.

Direct Expenses.

Indirect Expenses.

Overhead.

Factory Overhead.More items….

What are the main objectives of cost accounting?

Objectives of cost accounting are ascertainment of cost, fixation of selling price, proper recording and presentation of cost data to management for measuring efficiency and for cost control and cost reduction, ascertaining the profit of each activity, assisting management in decision making and determination of break- …

What are the five main purpose of cost accounting?

The main objective of cost accounting are ascertainment of cost, fixation of selling price, proper recording and presentation of cost data to management for measuring efficiency and for cost control and cost reduction, ascertaining the profit of each activity, assisting management in decision making process.

What are the 4 types of cost?

Following this summary of the different types of costs are some examples of how costs are used in different business applications.Fixed and Variable Costs.Direct and Indirect Costs. … Product and Period Costs. … Other Types of Costs. … Controllable and Uncontrollable Costs— … Out-of-pocket and Sunk Costs—More items…•

How do you classify the costs?

Cost Classification for Decision Making 5. Cost Classification by Nature of Production Process….Depending on the nature of production process, the cost can be classified into the following:Batch Cost: … Process Cost: … Operation Cost: … Operating Cost: … Contract Cost: … Joint Cost:

What are the three main objectives of accounting?

The following are the main objectives of accounting:To maintain full and systematic records of business transactions: ADVERTISEMENTS: … To ascertain profit or loss of the business: Business is run to earn profits. … To depict financial position of the business: … To provide accounting information to the interested parties:

What are the three elements of cost?

The Elements of Cost are the three types of product costs (labor, materials and overhead) and period costs.

What is scope of cost accounting?

The scope of cost accounting goes beyond analyzing the expenses associated with a product or activity. It takes various aspects into consideration, including the types of costs, potential business ventures, budget preparation, profitability analysis and more.

What are the essentials of a good cost accounting system?

(b) The Costing System must be economical to the organization and the benefits derived from the system should be more than its cost of installation and operation. (c) The system should be more flexible enough to take care of changing business situations and information needs of the organization.

What are the three costing systems in accounting?

Types of cost accounting include standard costing, activity-based costing, lean accounting, and marginal costing.

What are the functions of cost accounting?

Functions of Cost Accountingascertain the cost per unit of every product that the company manufactures.to identify any wastages whether in material, expense, time, tools and spares etc. … also, provide data that helps in the process of price fixing.calculate with accuracy the profitability of each of the company’s products.More items…