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Perhaps one of the most hard-to-understand concepts regarding finance and accounting is the concept of cost and how it is eventually determined. Therefore, GoAssignmentHelp offers impeccable and immaculate cost accounting assignment help.
Cost, which is an intriguing concept in accounting and economics, cannot be explained in any short-cut to effectively comprehend it. In accounting, cost refers to the monetary value of the total amount of expenses for supplies, products, equipment, services, labor, and other items bought for use by a company or business or any item bought for use by the business. Please note that is one of the many definitions of cost and subsequent cost accounting.
Arguably, the most important exercise of costing is to fix the cost of goods sold (COGS). To determine COGS, we must comprehend the three fundamental elements of costing, which are mentioned below.
The total cost of the work executed by workers who are involved in manufacturing a product is called direct labor cost.
Direct raw material cost refers to the total cost of raw materials that are directly involved in the process of manufacturing a specific product.
Manufacturing Overhead Cost (MOH) is the total of entire costs related to the cost object; however, it cannot be traced back directly to the cost object in a feasible way in terms of economics. That being said, it needs to be added to the overall cost to generate profits.
COGS Concepts - Know, how to calculate?
COGS or cost of goods sold is an intriguing concept in accounting, and as accounting students, you are required to solve complex problems related to COGS in a jiffy. Our cost accounting help can guide you in solving such problems. A COG is about the carrying value of the products that are sold in the market. To calculate the cost of goods sold about a specific product, you must mug up a few basic steps.
Step 1: You must know the number of units that are manufactured and the overall costs of such items per unit.
Step 2: To compute the total number of units that are manufactured, begin with the number of units at the start of the work in process. Add this number to the total number of units that are produced and finally subtract the total amount of units at the end of the work process. The following formula makes it easier to comprehend:
Number of units at the start of the work in process + Total number of units that are manufactured – Total number of units ending in the process = Total number of units that are manufactured
Step 3: By the above formula, you have the total number of units that are eventually manufactured. Next, you must calculate the total cost of goods that are manufactured.
Step 4: Because you have the total number of units and the total cost of goods that are manufactured, divide them to obtain the COGS per unit.
A comprehensive list of the various types of cost along with examples is given below in tabular format.
Types of Cost
|The cost that is directly involved in the actual manufacturing of goods or providing a service is called the actual cost to the company.||Raw material cost and wage bills|
|This cost refers to the cost of the economic endeavor not undertaken to produce present goods and services. In simpler terms, opportunity cost refers to the value of the most optimum alternative or the total value of opportunities lost.||Suppose a business has a specific area of land at its disposal but is presently not using it. The entity could have rented out that land and earned money. However, because the company is not doing so, the cost of such an unutilized chance is called an opportunity cost.|
|Those specific costs that do not vary or alter because of the nature of the business activity or level are called sunk costs. Sometimes, they are referred to as unavoidable or inescapable costs.||Depreciation cost|
|Incremental costs are the exact opposite of sunk costs. Costs that vary or increase based on the changes in business activities are called incremental costs.||Costs that are incurred due to alterations in the distribution network or costs incurred because of a product recall|
|Also known as paid-out costs, explicit costs refer to those costs that are paid by the firm.||Payment of interest on borrowed capital, payment of rent, and so on|
|Implicit costs are those costs that are not mentioned in the books of accounting. However, they influence a company’s business decisions.||Interest paid on equity capital, Depreciation costs on the property that is still in use, and Rent on idle land|
|Book costs are those costs that are not directly paid but provisions are made for such costs in the profit and loss statements that are generated.||Unpaid amount on owner’s capital and provision for depreciation|
|This cost is predominantly an outlay cost that is already incurred on a specific process or mode of production.||Sunk costs are also referred to as accounting costs|
|Future costs not yet incurred but which play a significant role in business decisions are known as economic costs.||Economic costs are quite similar in comparison with implicit and opportunity costs|
|Costs that are directly related to manufacture or unit of operation are called direct costs.||Cost of raw material|
|The costs that are related to the process of production but are not directly accountable to the cost object are called indirect costs.||Cost of land use and machinery|
To write an engaging and compelling Cost Accounting Assignment, you must know cost accounting inside-out, beginning with its definition.
Cost accounting is a process that primarily aims to determine a business’s total cost of production by effectively assessing input costs of each step of production as well as fixed costs, such as depreciation costs related to capital equipment.
Benefits of Cost Accounting
Cost accounting comes to the aid of companies and businesses in several ways:
Standard accounting practices are derived historically and are under Generally Accepted Accounting Principles (GAAP). In standard cost accounting, fixed costs are eventually calculated with variable costs.
This branch of cost accounting considers both environmental and economic info during the process of formulating the costs of goods.
Lifecycle assessment or LCA is a specialized form of environmental accounting that considers the potential increase in environmental costs that could occur through a product’s lifecycle.
This is a German-based accounting practice that provides managers with information support regarding a business enterprise’s optimization.
Target costing is a method of pricing utilized by firms. It can be accurately defined as the maximum cost amount that can be effectively incurred on a product, with the firm earning the required profit margin.
Activity-based accounting, which is also known as ABC, is yet another accounting practice that accurately assigns the overall cost of each activity with resources to all services and products, according to the precise consumption by each. Hence, it assists in separating three types of cost: fixed cost, overhead cost, and variable cost.
Lean accounting is an accounting practice that is associated with lean businesses. A lean enterprise had its origins in postwar Japan to tackle wastage that is associated with the manufacturing process. The primary purpose of lean accounting is to effectively support a lean enterprise.
All Cost Accounting Assignments questions undertaken by GoAssignmentHelp are written by PhD-qualified experts in this exclusive field. Thus, you can expect better grades for sure upon submission of the assignment. What’s more, we have in place state-of-the-art tools to crosscheck on plagiarism and other errors related to grammar, punctuation, and spelling, the result being a 100% original and error-free assignment. To top it all, we offer 24/7 support for any cost accounting assignment (help), quick turnaround time, affordable pricing, and strict adherence to deadlines. If you want we can also offer on-demand free cost accounting assignment samples. Lastly, we offer end-to-end cost accounting assignment help with all aspects surrounding cost accounting, be it lean accounting or target costing.
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