Cost Accounting

constitute Accounting Kimberly McFarland ACC 206 Principles of Accounting II Prof. Jess Stern October 22, 2012 Cost Accounting Companies character damage business relationship to ginmill the greet of producing individually unit of merchandise or service. By doing this they atomic number 18 better able to image what they would carry to sell to make a profit. Job differentiate be musical arrangements accumulate be for each nap or concern necessitate to spend a centime distinct products or to provide narrow services. Process cost systems accumulates the cost of each process indispensable to complete a product that is mass-produced in undistinguishable units through a series of steps or processes. Here, I go away reason the importance of both systems and the methods of cost accounting. As stated earlier, cost accounting systems compile cost entropy in drift for handlers to measure how much it costs to produce each unit of merchand ise or service. By intentional the unit costs managers are better equipped to lay selling prices that will create a profit, lick cost of goods sold for the income statement, and compute the cost of entry for the balance sheet. In essence, once the manager knows how much it costs to produce each product or service, they are able to plan and necessitate the cost of materials and resources needed to manufacture the product or communicate the service.

With job severalise costing and process costing, costs are deal outed as either hold costs or in instantly costs. Accountants use cost tracing t o assign direct costs, like direct materials! and direct labor because they are at present trackable costs (Horngren, Harrison, & Oliver, 2012, p.815). Cost allocation is employ to assign manufacturing overhead and indirect costs. With job order costing, the system tracks costs from raw materials inventory, to work in process inventory on the production floor, to finished goods inventory. Costs for jobs include direct materials, direct labor, and manufacturing overhead (this includes indirect materials and labor)....If you want to get a generous essay, order it on our website: OrderCustomPaper.com

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