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Cost accounting studies the cost structure of the company. It focuses on collecting information about the cost incurred by a company’s activities, assigning a selected cost to products and services and evaluating the efficiency of cost usage. IT is a business practise in which the accountant records, analyses and summarises overall cost spent on business processes. It is highly effective as it helps in cost controlling and making strategic planning and decisions on improving cost efficiency. Management gets the idea where they have to control the cost or where they have to increase more. With the help of cost accounting, the management can develop an effective future plan for the organisation. There are different kinds of cost accounting including marginal costing, standard cost accounting, lean accounting etc.
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Standard costing is a technique which helps to compare the cost that was incurred for the production of the goods and services. The standard cost put more emphasis on the efficient use of labour or material.
Activity-Based Costing defines the overhead cost from each department and assigns them to particular cost objects like goods and services. Furthermore, leading companies use this method to assign a cost to the products.
Marginal costing is also known as cost volume profit analyses. It defines the impact on the cost of a product by adding one additional unit into production. It is highly effective for short term economic decisions. Marginal costing assists management in understanding the impact of varying levels of cost and volume on operating profit. This type of analysis can be used by management to understand potentially profitable new products.
Lean accounting is the assortment of philosophies and procedures that offer numerical feedback for manufactures executing lean manufacturing and lean inventory practices.
Our Cost Accounting Assignment Help always try to explore the major concepts of cost. When you know the basics it becomes easy to answer the questions of cost accounting. Cost is used in different business applications like budgeting, valuation and financial accounting.
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