Introduction on the different Types of Costs incurred in the Company.
The purpose of this assignment is to design to enhance the skill in applying product costing in different organizations. In this assignment, I focused two methods of costing such as Job order costing and processing costing.
Cost accounting is needed so that there can be an effective management accounting. There is second side to accounting. This is one looks forwards and the output from it is used by decision-makers within the organization. It also consists of two components: one where costs are recorded and one where the data is processes and converted into reports for managers and other decision makers.
There are a number of ways costs can be gathered and collated. There are two most commonly used are absorption costing and marginal costing.
This involves allocating all direct costs and factory indirect expenses to products. The factory indirect expenses are seen as adding to the value of work in progress and, therefore, to finished goods. The production costs are of any article is thus comprised of direst materials, direct labour, any direct expenses and a share of factory indirect expense.
Marginal costing is used which takes account of only the variable cost of products rather than the full production cost. When using marginal costing for decision like this, care needs to taken that overall the decisions taken, sufficient additional income is generated to pay for all the fixed costs that are ignoed by marginal costing.
In job order Costing, I had taken the one of the famous tailor in Capital male City. The name of tailor is Noori Tailors.
Their main type’s things are for office coats for different organizations. Like Lecute, Wataniya, Bank of Maldives, STO Plc so on.
Job Costing: Job costing is concerned with the finding of the cost of each job or work order. This method is followed by these concerns when work is carried on by the...