User talk:Abdulai momodu jalloh

Cost accounting
cost It is amount of expenditure(actual or notional) incurred on, or attributable to a specified thing or activity.

Expenses- They are all costs other then material and wages. they can also be defined as the cost of hire services by the organization.

the classification of costs can be done in the following ways: 1. COST CLASSIFICATION BY NATURE/ELEMENT this aspect examines the elements or components of cost which are material, labour and expenses relating to both direct and indirect cost.

Material: These are inputs, which are processed into finished goods or semi finished goods.

Direct Material cost: this includes all items or commodities other than fixed assets that go directly into the production of goods and services.

Indirect material cost: this is a cost which cannot be easily identified with and allocated to cost centres or cost units.

Labour: this refers to human effort that is applied to produce and sell economic goods and services.

Direct Labour cost: this is the cost which can be directly identified with a product, or a cost centre.

Indirect Labour cost: this is the cost of employees payment made to workers who do not work directly on the product or service.

Expenses: this may be defined as the cost of a product or service provided by an organization.

Direct expenses: these are expenses which can be easily identified with and allocated to cost centres or cost units.

Indirect expenses: these are expenses that cannot be traced to a particular cost centre or cost unit.

fixed cost: this is a cost that remains unchanged over the level of activity or over long period if time. for eg. rent

Variable cost: this is a cost that changes with the level or volume of output or sales. eg cost of material.

Mixed cost:  As the name implies, this is the cost that contains both fixed or semi variable cost. eg supervision

CLASSIFICATION BY FUNCTION

. production (factory) overheads: these are overheads or indirect cost incurred in the factory.

Selling overheads: these are overheads incurred in inducing customers to buy the goods.

Distribution overheads: these are overheads incurred in transporting finished goods from the factory to the customers.

Administration overheads: these are also known as office expenses. these are overheads incurred in the day to day management of the firm.

Financial overheads/charges: these are overheads incurred in generating income form investment or they are expenses incurred in connection with financial transactions of a business. they may be incurred due to delay in payment.

MANAGERIAL DECISIONS OR CONTROL

Controllable cost: this is a cost that is influenced by a given number of the firm.

Uncomfortable cost: this is a cost that is not influenced by a given member of the firm.

Conversion cost: this is the cost of converting raw materials into finished goods. it is made up of direct Labour and production overheads excluding direct material cost.

Normal cost: this is a cost that is expected to occur under normal conditions.

Abnormal cost: this is a cost that is not expected to occur under normal working conditions.

Differential cost: it is cost that arises as a result of change in the level, pattern and method of production.

Implies cost: this is a cost that does not involve at anytime actual cash outlay and therefore do not appear in financial records. GROUPING OF COST Marginal cost: it is the cost at any given level of of output by which aggregate costs are changed if the volume of output is increases or decreases by one unit.

Sunk cost: it is cost that has already been incurred by a decision made in the past and cannot be changed by any decision that will be made in the future. in short, these are costs that are made in the past but cannot be influenced by future decision.

Notional cost: theae are costs which do not require cash payments. they represent the benefits enjoyed by an organization in respect of which no actual expenses are incurred.

Historical cost: these are actual costs incurred in acquiring materials. plant and services or it is a cost which has already been incurred.

Implicit cost: these are costs of the resources supplied by the owners.

Explicit costs: these are payments that are made for resources purchased from outside.

Real costs: is the goods and services forgone by employing the resources in their best or most profitable alternatives uses.

Money cost: is the amount of money spent to produce a particular good or services.

Standard cost: this ia the standard expressed in money. it is also a predetermined cost in relation to prescribed set of working conditions.

Budgeted cost: this is the predetermined total cost of an entire activity or operation of an organization.

Recorded costs: this refers to the actual cost that the organization has incurred or paid for. Recorded costs are used in financial statements for the determination of profit or loss.

ACCOUNTING FOR MATERIALS

Materials are items used in the production of goods or rendering of services. they involve a huge amount of capital, as a result of this, a system is designed to account for their movement control of their levels, material evaluation/pricing etc. Stock control is the system uaed in a firm to control the firm investment in stock in order to attain an efficient running of operation.

1.                    STOCK TAKING this is the process of physically counting or verifying the quantities, volume or value of material (stock) in the shop or store

Periodic stock taking: it is a method whereby stock is counted or verified at long intervels usually once or twice a year. Abdulai momodu jalloh (talk) 06:21, 18 May 2022 (UTC)