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Title: Case study in Organization-Finance & Accounting Details
Description: Costing Techniques are practiced in a leading organization in all activities, since it has precedence over other techniques. As the first step the accountant practices in an organization is analyzed in the following cost factors: -Ascertaining the costs -Controlling the costs -Reducing the costs
Description: Costing Techniques are practiced in a leading organization in all activities, since it has precedence over other techniques. As the first step the accountant practices in an organization is analyzed in the following cost factors: -Ascertaining the costs -Controlling the costs -Reducing the costs
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Observations from an Organization:
Costing
Techniques are practiced in a leading organization in all activities, since it has
precedence over other techniques
...
-Rent
-Insurance
-Management salary etc
Per unit of time these remain constant
...
This is also called as Period costs
...
-Property taxes
-Depreciation etc
-Discretionary fixed cost
These costs can be eliminated at any time and it is left to discretion of the management
...
Costs of:
-Direct material
-Direct labor
-Power
They are also called as Product Costs
...
They are made up of fixed and variable
elements such as
- Depreciation
- Repairs
- Light
- Telephone etc
Step Cost:
These costs remain stable over a range of activity and then jump to a new level as activities alters
or develops
...
5000/ per month
...
Hence a rise in rent for that goes up to 10,000/ per month
...
Indirect Costs:
These costs cannot be directly, conveniently and wholly identified, with a specific job or product
...
Or any machinery fault would result in
shutdown of the units
...
Such
costs are termed as shutdown costs
...
In our organization huge amount was invested in Slag Crusher, in the boiler area
...
So, it was removed
...
The amount invested on it was irrelevant
...
9500/-)
...
Imputed or Hypothetical Costs:
Interest on capital is an example
...
If two projects are on the anvil then the interest amount on capital will be looked into for safe
investments
...
They
may be incremental or detrimental
...
In a Thermal Station we get lignite through belt conveyors of mines
...
The expenses due to this decision were in mind and the resultant gain by power generation revenue
was calculated and stressed that it is profitable
...
Traceable, Untraceable Costs:
These are also named as common costs
...
Eg:
overheads incurred for factory as a whole
...
Lignite is utilized for power generation as well as for production of LECO
...
But the resultant production is power and LECO
...
Conversion Cost:
To convert one material into another material can be termed as conversion cost
...
In this manner various costs are listed out and included in the cost sheet of the Financial Statement
and submitted every year
...
The Cost Accountant takes up this assignment in coordination of all the divisions and personnel’s
and not a single detail is left out to calculate the cost of the product accurately
...
Consider the following:
Sales
Rs 30, 000
Variable Cost
Rs 22,000
Contribution
Rs 8,000
Fixed Cost
Rs 7,000
Profit
Rs 1,000
Units sold = Rs 20, 000
a) Compute P/v Ratio
b) Breakeven point
c) Sales required earning a profit of Rs
...
6%
Break Even Point = fixed cost
P/v ratio
= 7000/ 8/30
= 7000 X 30/8 = 210000/8
= Rs 26250
c) Sales required earning a profit Rs
...
Desired Sales
= Fixed Costs + Desired Profit /P/V Ratio
= 7000 +2000 / 8/30
= 270000 /8
= Rs33750
Title: Case study in Organization-Finance & Accounting Details
Description: Costing Techniques are practiced in a leading organization in all activities, since it has precedence over other techniques. As the first step the accountant practices in an organization is analyzed in the following cost factors: -Ascertaining the costs -Controlling the costs -Reducing the costs
Description: Costing Techniques are practiced in a leading organization in all activities, since it has precedence over other techniques. As the first step the accountant practices in an organization is analyzed in the following cost factors: -Ascertaining the costs -Controlling the costs -Reducing the costs