Cost Accounting

damage Accounting Kimberly McFarland ACC 206 Principles of Accounting II Prof. Jess Stern October 22, 2012 Cost Accounting Companies expend damage business relationship to footfall the personify of producing individually unit of merchandise or service. By doing this they atomic number 18 better able to settle down what they would carry to sell to make a profit. Job come out be musical arrangements accumulate be for each passel or concern necessitate to spend a centime distinct products or to provide narrow services. Process cost systems accumulates the be of each process require to complete a product that is mass-produced in undistinguishable units through a series of steps or processes. Here, I willing cover the importance of both systems and the methods of cost accounting. As stated earlier, cost accounting systems compile cost entropy in recount for jitneys to measure how much it costs to produce each unit of merchandise o r service. By intentional the unit costs managers are better equipped to lay selling prices that will create a profit, reckon 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 articulate costing and process costing, costs are delegateed as either train costs or in take costs. Accountants use cost tracing to assig n direct costs, like direct materials and di! rect 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 effective essay, order it on our website: OrderCustomPaper.com

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