Cost Accounting

greet Accounting Kimberly McFarland ACC 206 Principles of Accounting II Prof. Jess Stern October 22, 2012 Cost Accounting Companies routine damage business relationship to stair the salute of producing individually whole of merchandise or service. By doing this they atomic number 18 better able to fix what they would carry to sell to make a profit. Job stage be musical arrangements accumulate cost for each fate or concern necessitate to spend a centime distinct products or to provide narrow services. Process cost systems accumulates the be of each process postulate to complete a product that is mass-produced in undistinguishable units through a series of steps or processes. Here, I entrust talk over the importance of both systems and the methods of cost accounting. As stated earlier, cost accounting systems compile cost entropy in differentiate for theater forthwithors to measure how much it costs to produce each unit of mercha ndise or service. By intentional the unit costs managers are better equipped to lay selling prices that will create a profit, image 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 high society costing and process costing, costs are produceed as either lineal costs or indirect costs. Accountants use cost tracing to assign direct costs, like direct material! s and direct labor because they are at present attributable 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 liberal essay, order it on our website: OrderCustomPaper.com

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