accounting management

COST CLASSIFICATION, CONCEPT, AND PURPOSE

The importance for Cost Information
Cost information used by manager for five aims:
1. Stockpiling research, management shall know cost which that includes in investor firm.
2. Propertied determination, management needs to know cost that reduce of income in write-up balance to establish gain in one period.
3. Financial planning, management needs cost information to plot future with desirable financial target.
4. Controlling, management needs information hit current cost result than expectation cost.
5. Decision maker, management oftentimes evaluates a group cost with kind – actions alternative kind which best option that is chosen. This is spontaneous on product or service design, combine or pricing.
Two terminologies that right usually been used for deep accounting management vocabulary is cost and charges. Cost is sacrificial economic of resource traded by one product or service, meanwhile charges is cost that expired. Before we can decide mean of a wide variety cost type, we shall identify aim for what we want that information. Point the importance for is that cost that variably will be used for the purpose which variably

Business enterprise Type kinds of
Service firm
Two accounting judgment basics for service firm is:
1. Relative cost big for employee
2. Out of stock
Early investment for most of service firm not many or little compared with by business that gets orientation on stockpiling. Prevailing the same thing for charges to had out be reduce, advertising, and control. Inversely, human resource cost as wages, commission, training and significance tend insurance.

Trade firm
Gains level measure which be of important deep operational trade be gross profit which net sales be reduced by cost goods that sold. A part essential of accounting for such a operational is differentiate aright among stockpiling cost with happening operational charges deep sell and administration. Another important point is that trade operational usually been divided as department – department up on product or service that is on the market.
Manufacturing business
Producing manufacture business product that bought by retailer and grocery. Severally corporate also direct sells to society. Distribution channel regardless it, firm buys raw material and change it as finished goods on sale.

Cost classification Terminological Business Function
Needed cost in exhaustive service firm type, for commerce and manufacturing results income. Item is special cost happens to terminological firm application and classification way it clings to business function that did by firm. Manufacturing business in a general way is type carry on business most complex the favor accounting because attach production function, sell, and administration. Manufacturing cost covers all needed cost to get raw material from supplier and revamps it as finished goods which salable deep shaped different one. Cost of sales is exhaustive cost which happens to market and dropped finished goods. Administration cost is exhaustive cost which be needed for management generically corporate.

Product cost And Period
Accrual accounting doesn't let all cost becomes charges reduce income in write-up balance in a period which that cost initially been noted. Product cost terminology and momentous period cost in developmental write-up balance on corporate trade and manufacturing. Product cost is happening cost to have in stock until at the moment ready on sale. Product cost for corporate trade just consisting of buy cost because stockpiling buy ready to been resoled. In manufacturing business, all manufacturing cost element that needed to produce salable product treated as product cost. Product cost at inventorying as revaluation on balance until that products sold.

Direct cost And Indirect Cost
meaning objective cost as umpteen as activity which is done as cost of measurement that impartially. In many case, objective cost will get to measure of outgrows it output, be on the other relationship constitutes a part operation of an organization. Direct cost can be downed from special objective cost because that thing happening one eye – eye as gain of objective cost singles. Indirect cost can happen from objective cost, so constitutes general cost. Indirect cost can be downed from single objective cost, it can be utilized just in many allocation basis. Cost's mean is indirect is merging among umpteen included objective cost among those is gain at the expense.

Alternative save Of Product Cost Production Process
Severally accountant manager have extension on savvy of product cost on given production case to be inserted on same cost among producing and distributes product. The most popular trick is constant clarification product about sell and administration cost as period cost and at most to reduce it of product that is engaged gross profit on balance that separately on each product or its product line. Upon same, we need to recognize that this alternative approaching illustrated that accounting management is flexible without trick which drew by best for all case, where exists distinctive cost for the purpose that different. And is not all accounting manager agree with to have say it.

Manufacturing's Cost element
Direct raw material

Are raw material that directly get as been looked for complement part of finished goods was called by raw material direct. Indirect raw material excluding as gets kind – item's kind as lubricating oil, paste, treated screw as raw material indirect and is inserted deep cost others.

Indirect labour
Compensation that is paid on employ that time and its effort can be found on goods that are classified as labours direct. Direct labours also is part of finished goods up to process value added in manufacturing after gets is found on goods. Needed other labours to back up production process but won't be found to solve product.

BOP
BOP can also be came to pieces as manufacturing's cost indirect, factory overhead cost or factory charges. BOP covers many item costs, for example:
1. Indirect raw material
2. Indirect labour
3. Preserve
4. Utility
5. Lending
6. Insurance
7. property's taxes
8. Income tax

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