Assigning variable costs according to the activity levels is direct costing.Some such methods of costing to ascertain these costs are historical costing, standard costing, etc. We follow certain rules and principles to guide us in this ascertaining of costs. Meaning of CostingД¬osting is essentially a technique via which we assign or costs to various elements of the business. It is advisable to classify costs as it gives more information about it. All costs can be qualified as prime cost, sunk cost, factory cost, direct cost, indirect cost, etc. While cost is a very generic term, it can be classified further. Value is measured in terms of the usefulness of the product, the cost is measured strictly in monetary terms.

The cost will be the expenditure that is attributable to something. In commercial terms, the cost is the monetary valuation of the effort, materials, risks and opportunity costs all put together.Д¬ost is also defined as by the expenditure incurred to produce a given good or service. How does one define with the cost of something? It is the amount to be paid for a good or service or the resources given in exchange for such good or service.

Identification of Unprofitable Activities.Importance and Objectives of Cost Accounting The variable cost per unit, however, remains the same. Variable costs change in relation to production levels. As the name suggests these costs remain the same irrespective of the production quantities. This type of costing is based on the principle of dividing all costs into fixed cost and variable cost.ДЇixed costs are unrelated to the levels of production. Standard costing is a technique where the firm compares the costs that were incurred for the production of the goods and the costs that should have been incurred for the same. Types and Classification of Cost Accounting It can disclose wastage of time and resources Is also a great tool to figure out the efficiency of a unit or a process.provides costing data that helps in fixing prices of goods and services.It helps to establish certain standard costs and budgets.Provides data to management for decision making and budgeting for the future.It is the process of accounting for costs Characteristics of an Ideal Costing System.Origin and Evolution of Cost Accounting.Browse more Topics under Fundamentals Of Cost Accounting It deals with the cost of every unit, job, process, order, service, etc, whichever is applicable and includes the cost of production, cost of selling and cost of distribution. It also involves a suitable presentation of this data for the purposes of cost control and guidance to the management. This helps us calculate the costs of the various goods. This data is generally used in financial accounting. It involves the recording, classification, allocation of various expenditures,В and creating financial statements. It is a process via which we determine the costs of goods and services.

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