Methods / Techniques of Cost Accounting

5029 Words Oct 30th, 2012 21 Pages
Ex-MBA 2011-2014 ( Batch - Weekend )

Semester - 2
Subject: Managerial Accounting
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Title : Methods / techniques of cost accounting

Submitted by : Vishwajeet Gaikwad – 2011G04 Submitted to : Prof. Sameer Deshmukh

INDEX

SR NO | TITLE | PAGE NO | 1 | INTRODUCTION | 3 | 2 | METHODS OF COST ACCOUNTING | 4 | 3 | TECHNIQUES OF COST ACCOUNTING | 8 | 4 | USEFULNESS | 10 | | | | | | | 5
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The system is used generally in cases where government happens to be the party to give contract.
D. Batch Costing
This method is employed where orders or jobs are arranged in different batches after taking into account the convenience of producing articles. The unit of cost is a batch or a group of identical products instead of a single job order or contract. This method

is particularly suitable for general engineering factories which produce components in convenient economic batches and pharmaceutical industries.
E. Process Costing
If a product passes through different stages, each distinct and well defined, it is desired to know the cost of production at each stage. In order to ascertain the same, process costing is employed under which a separate account is opened for each process.
This system of costing is suitable for the extractive industries, e.g., chemical manufacture, paints, foods, explosives, soap making etc.
F. Operation Costing
Operation costing is a further refinement of process costing. The system is employed in the industries of the following types: a. The industry in which mass or repetitive production is carried out b. The industry in which articles or components have to be stocked in semi-finished stage to facilitate the execution of special orders, or for the convenience of issue for later operations
The procedure of costing is broadly the same as process costing except that in this case, cost unit is an