New Page 1

LA GRAMMATICA DI ENGLISH GRATIS IN VERSIONE MOBILE   INFORMATIVA PRIVACY

  NUOVA SEZIONE ELINGUE

 

Selettore risorse   

   

 

                                         IL Metodo  |  Grammatica  |  RISPOSTE GRAMMATICALI  |  Multiblog  |  INSEGNARE AGLI ADULTI  |  INSEGNARE AI BAMBINI  |  AudioBooks  |  RISORSE SFiziosE  |  Articoli  |  Tips  | testi pAralleli  |  VIDEO SOTTOTITOLATI
                                                                                         ESERCIZI :   Serie 1 - 2 - 3  - 4 - 5  SERVIZI:   Pronunciatore di inglese - Dizionario - Convertitore IPA/UK - IPA/US - Convertitore di valute in lire ed euro                                              

 

 

WIKIBOOKS
DISPONIBILI
?????????

ART
- Great Painters
BUSINESS&LAW
- Accounting
- Fundamentals of Law
- Marketing
- Shorthand
CARS
- Concept Cars
GAMES&SPORT
- Videogames
- The World of Sports

COMPUTER TECHNOLOGY
- Blogs
- Free Software
- Google
- My Computer

- PHP Language and Applications
- Wikipedia
- Windows Vista

EDUCATION
- Education
LITERATURE
- Masterpieces of English Literature
LINGUISTICS
- American English

- English Dictionaries
- The English Language

MEDICINE
- Medical Emergencies
- The Theory of Memory
MUSIC&DANCE
- The Beatles
- Dances
- Microphones
- Musical Notation
- Music Instruments
SCIENCE
- Batteries
- Nanotechnology
LIFESTYLE
- Cosmetics
- Diets
- Vegetarianism and Veganism
TRADITIONS
- Christmas Traditions
NATURE
- Animals

- Fruits And Vegetables


ARTICLES IN THE BOOK

  1. Account
  2. Accountancy
  3. Accountant
  4. Accounting cycle
  5. Accounting equation
  6. Accounting methods
  7. Accounting reform
  8. Accounting software
  9. Accounts payable
  10. Accounts receivable
  11. Accrual
  12. Adjusted basis
  13. Adjusting entries
  14. Advertising
  15. Amortization
  16. Amortization schedule
  17. Annual report
  18. Appreciation
  19. Asset
  20. Assets turnover
  21. Audit
  22. Auditor's report
  23. Bad debt
  24. Balance
  25. Balance Sheet
  26. Banking
  27. Bank reconciliation
  28. Bankruptcy
  29. Big 4 accountancy firm
  30. Bond
  31. Bookkeeping
  32. Book value
  33. British qualified accountants
  34. Business
  35. Business process overhead
  36. Capital asset
  37. Capital goods
  38. Capital structure
  39. Cash
  40. Cash flow
  41. Cash flow statement
  42. Certified Management Accountant
  43. Certified Public Accountant
  44. Chartered Accountant
  45. Chartered Cost Accountant
  46. Chart of accounts
  47. Common stock
  48. Comprehensive income
  49. Consolidation
  50. Construction in Progress
  51. Corporation
  52. Cost
  53. Cost accounting
  54. Cost of goods sold
  55. Creative accounting
  56. Credit
  57. Creditor
  58. Creditworthiness
  59. Current assets
  60. Current liabilities
  61. Debentures
  62. Debits and Credits
  63. Debt
  64. Debtor
  65. Default
  66. Deferral
  67. Deferred tax
  68. Deficit
  69. Deloitte Touche Tohmatsu
  70. Depreciation
  71. Direct tax
  72. Dividend
  73. Double-entry bookkeeping system
  74. Earnings before interest and taxes
  75. Earnings Before Interest, Taxes and Depreciation
  76. Earnings before Interest, Taxes, Depreciation and Amortization
  77. Engagement Letter
  78. Equity
  79. Ernst a& Young
  80. Expense
  81. Fair market value
  82. FIFO and LIFO accounting
  83. Finance
  84. Financial accounting
  85. Financial audit
  86. Financial statements
  87. Financial transaction
  88. Fiscal year
  89. Fixed assets
  90. Fixed assets management
  91. Fixed Assets Register
  92. Forensic accounting
  93. Freight expense
  94. Fund Accounting
  95. Furniture
  96. General journal
  97. General ledger
  98. Generally Accepted Accounting Principles
  99. Going concern
  100. Goodwill
  101. Governmental accounting
  102. Gross income
  103. Gross margin
  104. Gross profit
  105. Gross sales
  106. Historical cost
  107. Hollywood accounting
  108. Imprest system
  109. Income
  110. Income tax
  111. Indirect tax
  112. Insurance
  113. Intangible asset
  114. Interest
  115. Internal Revenue Code
  116. International Accounting Standards
  117. Inventory
  118. Investment
  119. Invoice
  120. Itemized deduction
  121. KPMG
  122. Ledger
  123. Lender
  124. Leveraged buyout
  125. Liability
  126. Licence
  127. Lien
  128. Liquid asset
  129. Long-term assets
  130. Long-term liabilities
  131. Management accounting
  132. Matching principle
  133. Mortgage
  134. Net Income
  135. Net profit
  136. Notes to the Financial Statements
  137. Office equipment
  138. Operating cash flow
  139. Operating expense
  140. Operating expenses
  141. Ownership equity
  142. Patent
  143. Payroll
  144. Pay stub
  145. Petty cash
  146. Preferred stock
  147. PricewaterhouseCoopers
  148. Profit
  149. Profit and loss account
  150. Pro forma
  151. Purchase ledger
  152. Reserve
  153. Retained earnings
  154. Revaluation of fixed assets
  155. Revenue
  156. Revenue recognition
  157. Royalties
  158. Salary
  159. Sales ledger
  160. Sales tax
  161. Salvage value
  162. Shareholder
  163. Shareholder's equity
  164. Single-entry accounting system
  165. Spreadsheet
  166. Stakeholder
  167. Standard accounting practice
  168. Statement of retained earnings
  169. Stock
  170. Stockholders' deficit
  171. Stock option
  172. Stock split
  173. Sunk cost
  174. Suspense account
  175. Tax bracket
  176. Taxes
  177. Tax expense
  178. Throughput accounting
  179. Trade credit
  180. Treasury stock
  181. Trial balance
  182. UK generally accepted accounting principles
  183. United States
  184. Value added tax
  185. Value Based Accounting Standards and Principles
  186. Write-off
 



ACCOUNTING
This article is from:
http://en.wikipedia.org/wiki/Cost_accounting

All text is available under the terms of the GNU Free Documentation License: http://en.wikipedia.org/wiki/Wikipedia:Text_of_the_GNU_Free_Documentation_License 

Cost accounting

From Wikipedia, the free encyclopedia

 

Cost accounting is the process of tracking, recording and analyzing costs associated with the products or activities of an organization. In modern accounting, costs are measured in accordance with the Generally Accepted Accounting Principles (GAAP). GAAP reporting records historical events and assigns a monetary value to each event that has taken place. Costs are measured in units of currency by convention. Cost accounting could also be defined as a kind of management accounting that translates the Supply Chain (the series of events in the production process that, in concert, result in a product) into financial values. Managers use cost accounting to support decision making to reduce a company's costs and improve its profitability.

There are at least four approaches:

  • Standard Cost Accounting
  • Activity-based Costing
  • Throughput Accounting
  • Marginal Costing

Origins

Cost accounting has long been used to help managers understand the costs of running a business. Modern cost accounting originated during the industrial revolution, when the complexities of running a large scale business led to the development of systems for recording and tracking costs to help business owners and managers make decisions.

In the early industrial age, most of the costs incurred by a business were what modern accountants call "variable costs" because they varied directly with the amount of production. Money was spent on labor, raw materials, power to run a factory, etc. in direct proportion to production. Managers could simply total the variable costs for a product and use this as a rough guide for decision-making.

Some costs tend to remain the same even during busy periods, unlike variable costs which rise and fall with volume of work. Over time, the importance of these "fixed costs" has become more important to managers. Examples of fixed costs include the depreciation of plant and equipment, and the cost of departments such as maintenance, tooling, production control, purchasing, quality control, storage and handling, plant supervision and engineering. In the early twentieth century, these costs were of little importance to most businesses. However, in the twenty-first century, these costs are often more important than the variable cost of a product, and allocating them to a broad range of products can lead to bad decision making. Managers must understand fixed costs in order to make decisions about products and pricing.

For example: A company produced railway coaches and had only one product. To make each coach, the company needed to purchase $60 of raw materials and components, and pay 6 laborers $40 each. Therefore, total variable cost for each coach was $300. Knowing that making a coach required spending $300, managers knew they couldn't sell below that price without losing money on each coach. Any price above $300 became a contribution to the fixed costs of the company. If the fixed costs were, say, $1000 per month for rent, insurance and owner's salary, the company could therefore sell 5 coaches per month for a total of $3000 (priced at $600 each), or 10 coaches for a total of $4500 (priced at $450 each), and make a profit of $500 in both cases.

Standard Cost Accounting

In modern cost accounting, the concept of recording historical costs was taken further, by allocating the company's fixed costs over a given period of time to the items produced during that period, and recording the result as the total cost of production. This allowed the full cost of products that were not sold in the period they were produced to be recorded in inventory using a variety of complex accounting methods, which was consistent with the principles of Generally Accepted Accounting Principles (GAAP) as established by the Financial Accounting Standards Board for reporting results of publicly owned companies. It also enabled managers to effectively ignore the fixed costs, and look at the results of each period in relation to the "standard cost" for any given product.

For example: if the railway coach company normally produced 40 coaches per month, and the fixed costs were still $1000/month, then each coach could be said to incur an overhead of $25 ($1000/40). Adding this to the variable costs of $300 per coach produced a full cost of $325 per coach.

This method tended to slightly distort the resulting unit cost, but in mass-production industries that made one product line, and where the fixed costs were relatively low, the distortion was very minor.

For example: if the railway coach company made 100 coaches one month, then the unit cost would become $310 per coach ($300 + ($1000/100)). If the next month the company made 50 coaches, then the unit cost = $320 per coach ($300 + ($1000/50)), a relatively minor difference.

An important part of standard cost accounting is a variance analysis which breaks down the variation between actual cost and standard costs into various components (volume variation, material cost variation, labor cost variation, etc.) so managers can understand why costs were different than planned and take appropriate action to correct the situation.

Weaknesses of Standard Cost Accounting for Management Decision Making

As time went on, standard cost accounting lost its usefulness for management decision making due to a variety of reasons:

  • The practice of paying workers on a 'set-piece' basis changed in favour of paying on an hourly rate.
  • Modern companies tend to have relatively low truly variable costs (primarily raw material, commissions or casual workers) and very high fixed costs (worker salaries, engineering costs, quality control, etc.).
  • Equipment has become more complex and specialized and may be a very significant proportion of total costs.
  • Changes in the level of full cost inventory create swings in profitability that are difficult to explain or understand. An increase in inventory can "absorb" costs of production and increase profits, while a decrease in inventory level will decrease profits.
  • Organizations with a wide range of products or services have processes which are common to several finished items, making cost allocation irrelevant or misleading.

As a result of the above, using standard cost accounting to analyze management decisions can distort the unit cost figures in ways that can lead managers to make decisions that do not reduce costs or maximize profits. For this reason, managers often use the terms "direct costs" and "indirect costs" to replace the standard costing, to better reflect the way allocation of overhead is actually calculated. Indirect costs (often large) are usually allocated in proportion to either labor cost, other direct costs, or some physical resource utilization.

For example: If the railway coach company now paid its workforce a fixed monthly rate of $8,000 (total) and its other fixed costs had risen to $2,600/month, the total fixed costs would then be $10,600/month. The unit cost to make 40 coaches per month would still be $325 per coach ($60 material + ($10,600/40)), but producing 100 coaches would result in a unit cost of $166 per coach ($60 + ($10, 600/100)), provided the company had the capacity to increase production to that level.

Managers using the standard cost for 40 coaches per month would likely reject an order for 100 coaches (to be produced in one month) if the selling price was only $300 per unit, seeing that it would result in a loss of $25 per unit. If they analyzed the fixed vs. variable cost distinction, they would see clearly that filling this order would result in a contribution to fixed costs of $240 per coach ($300 selling price less $60 materials) and would result in a net profit for the month of $13,400 (($240 x 100) - 10,600).

The Development of Throughput Accounting

As companies have become more complex and begun producing a variety of products, the use of cost accounting to make decisions to maximize profitability has come under question. Managers learned in the 1980's about the theory of constraints and began to understand that every production process has a limiting factor somewhere in the chain of production. As managers learned to identify the constraints, they learned to use throughput accounting to manage them and maximize the throughput dollars from each unit of constrained resource.

For example: The railway coach company was offered a contract to make 15 open-topped streetcars each month, using a design which included ornate brass foundry work, but very little of the metalwork needed to produce a covered railway coach. The buyer offered to pay $280 per streetcar. The company had a firm order for 40 railway coaches each month for $350 per unit.

But this may not be true in many occasions

The company accountant determined that the cost of operating the foundry vs. the metalwork shop each month was as follows:
 


 

The company was at full capacity making 40 railway coaches each month. And since the foundry was expensive to operate, and purchasing brass as a raw material for the streetcars was expensive, the accountant determined that the company would lose money on any streetcars it built. He showed an analysis of the estimated product costs based on standard cost accounting and recommended that the company decline to build any streetcars.
 
However, the operations manager had just made improvements in the foundry equipment, and she knew there was idle time for the workers making coaches there. The constraint was the metalwork shop. She made an analysis of profit and loss if the company took the contract using throughput accounting to determine the profitability of products by maximizing "throughput" (revenue less variable cost) in the metal shop.
 
The president saw that the metalshop capacity was limiting the company's profitability. They could make only 40 railway coaches per month. But by taking the contract for the streetcars, the company could make nearly all the railway coaches ordered, and also meet all the demand for streetcars. The result would increase throughput in the metal shop from $6.25 to $10.38 per hour of available time, and increase profitability by 66 percent.

Activity-based costing

Activity-based costing (ABC) is a system for assigning costs to products based on the activities they require. In this case, activities are those regular actions performed inside a company. "Talking with customer regarding invoice questions" is an example of an activity performed inside most companies.

Accountants assign 100% of each employee's time to the different activities performed inside a company (many will use surveys to have the workers themselves assign their time to the different activities). The accountant then can determine the total cost spent on each activity by summing up the percentage of each worker's salary spent on that activity.

Each product or service is produced and delivered via the activities performed in the company. The accountant can then assign the different activities to the different products using an appropriate allocation method.

A company can use the resulting activity cost data to determine where to focus their operational improvement efforts. For example, a job based manufacturer may find that a high percentage of their workers are spending their time trying to figure out a hastily written customer order. Via ABC, the accountants now have a currency amount that will be associated with the activity of "Researching Customer Work Order Specifications". Senior management can now decide how much focus or money to budget for the resolutions of this process deficiency. Activity-based management includes (but is not restricted to) the use of activity-based costing to manage a business.

Marginal Costing

This method is used particularly for short-term decision-making. Its principal tenets are:

  • Revenue (per product) - Variable Costs (per product) = Contribution (per product)
  • Total Contribution - Total Fixed Costs = Total Profit or (Total Loss)

Thus it does not attempt to allocate fixed costs in an arbitrary manner to different products. The short-term objective is to maximise contribution per unit. If constraints exist on resources, then Managerial Accounting dictates that marginal cost analysis be employed to maximise contribution per unit of the constrained resource (see Development of Throughput Accounting, above).

Other costing methods

More varieties of costing methods have been proposed in order to tailor for different aspects of the business. Some of the uprising ones include inventory costing method, process costing method, average costing method, target costing method.

Still, the standard methods and normal costing methods are the most established methods in the world of public accounting. For management accountants in private industry, throughput accounting is rapidly becoming the standard for use in decision making in a fast-paced business environment.

See also

  • Accountancy
  • Management accounting
  • LIFO
  • FIFO
  • Methods of costing:
    • Job costing
    • Batch costing
    • Process costing
    • Contract costing
  • Cost centre
  • Profit centre
  • Process losses:
    • Normal loss
    • Abnormal loss
  • Cost behavour
  • Linear regression analysis
  • Learning curve theory
  • By product costing
  • Joint product

External links

  • Cost accountancy in India
Retrieved from "http://en.wikipedia.org/wiki/Cost_accounting"

  

 

 


 

 
CONDIZIONI DI USO DI QUESTO SITO
L'utente può utilizzare il nostro sito solo se comprende e accetta quanto segue:

  • Le risorse linguistiche gratuite presentate in questo sito si possono utilizzare esclusivamente per uso personale e non commerciale con tassativa esclusione di ogni condivisione comunque effettuata. Tutti i diritti sono riservati. La riproduzione anche parziale è vietata senza autorizzazione scritta.
  • Il nome del sito EnglishGratis è esclusivamente un marchio e un nome di dominio internet che fa riferimento alla disponibilità sul sito di un numero molto elevato di risorse gratuite e non implica dunque alcuna promessa di gratuità relativamente a prodotti e servizi nostri o di terze parti pubblicizzati a mezzo banner e link, o contrassegnati chiaramente come prodotti a pagamento (anche ma non solo con la menzione "Annuncio pubblicitario"), o comunque menzionati nelle pagine del sito ma non disponibili sulle pagine pubbliche, non protette da password, del sito stesso.
  • La pubblicità di terze parti è in questo momento affidata al servizio Google AdSense che sceglie secondo automatismi di carattere algoritmico gli annunci di terze parti che compariranno sul nostro sito e sui quali non abbiamo alcun modo di influire. Non siamo quindi responsabili del contenuto di questi annunci e delle eventuali affermazioni o promesse che in essi vengono fatte!
  • L'utente, inoltre, accetta di tenerci indenni da qualsiasi tipo di responsabilità per l'uso - ed eventuali conseguenze di esso - degli esercizi e delle informazioni linguistiche e grammaticali contenute sul siti. Le risposte grammaticali sono infatti improntate ad un criterio di praticità e pragmaticità più che ad una completezza ed esaustività che finirebbe per frastornare, per l'eccesso di informazione fornita, il nostro utente. La segnalazione di eventuali errori è gradita e darà luogo ad una immediata rettifica.

     

    ENGLISHGRATIS.COM è un sito personale di
    Roberto Casiraghi e Crystal Jones
    email: robertocasiraghi at iol punto it

    Roberto Casiraghi           
    INFORMATIVA SULLA PRIVACY              Crystal Jones


    Siti amici:  Lonweb Daisy Stories English4Life Scuolitalia
    Sito segnalato da INGLESE.IT