What is Activity Based Costing (ABC)?
What is Activity-Based Costing? Activity-based costing is an accounting method that assigns costs to the different activities involved in making a
Read moreCost Accounting
Cost accounting is a process of recording, classifying, analyzing, summarizing allocating and evaluating various alternative courses of action and control of costs. Its goal is to advise the management on the most appropriate course of action based on the cost efficiency and capability. Cost accounting provides the detailed cost information that management needs to control current operations and plan for the future.
Since managers are making decisions only for their own organization, there is no need for the information to be comparable to similar information from other organizations. Instead, information must be relevant for a particular environment. Cost accounting information is commonly used in financial accounting information, but its primary function is for use by managers to facilitate making decisions.
Basics of Costing
Cost is a word used to describe the money spent on a particular thing. In our private lives, we talk
Read moreERP Implementation Guidance for Management Accountants
Have clear objectives. Be prepared to listen to others. Expect and plan for a productivity dip in the first 2
Read moreEvaluation of Transfer Pricing Policies
Introduction When one department of company manufactures some product which is supplied to another department of the company, transfer pricing
Read moreCoffee Maker’s Incorporated (CMI) – Transfer Pricing Example
Coffee Maker’s Incorporated (CMI) Two divisions of a CMI are involved in a dispute. Division A purchases Part 101 and
Read moreWhat is Process Value Analysis
Process Value Analysis Process value analysis (PVA) is a technique that managers use to identify and link all the activities
Read moreWhat is Segment Contribution Margin
A segment contribution margin is a segment’s sales revenue minus its direct costs (direct variable costs and direct fixed costs
Read moreIs gross margin and contribution margin same
No; gross margin is not the same as contribution margin. Contribution margin is the difference between total revenues (TR) and total
Read moreHow to compute unit costs
Unit costs are computed by dividing some amount of total costs (the numerator) by the related number of units (the denominator).
Read moreCost Object – Definition
A cost object is anything for which a separate measurement of costs is desired. Examples include a product, a service,
Read more