internal assignment ca solution

7/31/2019 Internal Assignment CA Solution

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INTERNAL ASSIGNMENT

Name of the candidate: Akshay dembra

Enrollment no. : 02280301711

Course: B. B. A.

Batch: 2nd

Subject: Cost Accounting

Subject code: 110

Topic of assignment: Methods of Costing

Subject Teachers name: Ms. Shweta Jain

Assignment Submission Form


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(For office use only)

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Cost Accountancy

It is the process of accounting for costs. It embraces the accounting procedures relating to

recording of all income & expenditure & the preparation of periodical statements & reports with

the object of ascertaining & controlling costs. It is thus the formal mechanism by means of which

costs of products or services are ascertained & controlled.

Cost accountancy is also an art because it involves costing techniques & methods, such as thoseof differential costing, marginal costing, standard costing etc. The application of these techniques

helps the cost accountant in deciding how to control costs, whether to go for replacement of the

existing plant by a new one or not etc.

Methods of Costing

Costing has been defined as the technique & process of ascertaining costs.

The principles in every type of costing are the same but the methods of analyzing & presenting

the costs differ with the nature of business.

Road Transport Company & Bus Company

It comes under Operating Costing. The system is employed where expenses are incurred for

provision of services such as those rendered by bus companies, electricity companies or railway

companies. The total expenses regarding operation are divided by the units as may be

appropriate (e.g., total number of passenger-kilometers in case of bus company) and cost per unitof service is calculated.


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Soap Company & Chemical Company

All these companies come under Process Costing. If a product passes from different stages,each distinct & well-defined, it is desired to know the cost of production at each stage. In order

to ascertain the same, process costing is employed under which separate account is opened for

each processes.

Handles for Bicycles

It comes under Operating Costing. It is further refinement of process costing. The system is

employed in industries where mass or repetitive production is carried out or where articles orcomponents have to be stocked in semi-finished stage, to facilitate the execution of special

orders, or for convenience of issue for later operations. The procedure of costing is broadly the

same as for process costing except the cost unit is an operation instead of a process.

Manufacturing of Handles for Bicycles involves a number of operations such as those of cutting

steel sheets into proper strips, moulding, machining & finally polishing. The cost of each one of

these operations may be found out separately.

Construction Company

It comes under Contract Costing. This costing does not in principle differs from Job Costing.

A contract is a big job while a job is a small contract. The term is usually applied where at

different sites large scale contracts are carried out. In case of Construction Work, Ship-builders,

Printers etc., this system of costing is used.

Job or Contract costing is also termed as Terminal Costing.


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Specialized Industrial Equipments & Furniture

Both come under Job Costing where production is not highly repetitive & in addition, consists

of different jobs or lots so that material & labour costs can be identified by order number, the

system of job costing is used. This method of costing is very common in commercial foundries

& drop forging shops & in plants making specialized industrial equipments. In all these cases an

account is opened for each job & all appropriate expenditure is charged thereto.

Pharmaceutical company

It comes under Batch Costing where orders or jobs are arranged in different batches after

taking into account the convenience of producing articles, batch costing is employed. Thus, in

this method, the cost of a group of products is ascertained. The unit of cost is a batch of group of

identified products, instead of a single job order or contract. The method is particularly suitable

for Pharmaceutical Industries & general engineering factories which produce components in

convenient economic batches.


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Bibliography Cost Accounting by Dr. S.N. Maheshwari & Dr. S.N. Mittal

www.nos.org/srsec320newE/320EL27a.pdf

www.theglobaltutors.com/ cost -accounting /

www.future account ant.com/process- cost ing/

www.varsitynotes.com Accounting
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