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 ASCERTAINMENT OF COST

DETERMINATION OF SELLING
PRICE

COST CONTROL AND COST

REDUCTION

ASCERTAINING THE PROFIT OF

EACH ACTIVITY

ASSISTING MANAGEMENT IN
DECISION MAKING

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Management of business concerns expects from Cost Accounting
detailed cost information in respect of its operations to equip
their executives with relevant information required for planning,
scheduling, controlling and decision making. To be more specific,
management expects from cost

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vCost sheets
vConsumption of material statements
vLabor utilization statements
vOverheads
vSales effected compared with budgets
vReconciliation of actual profit earned with estimated or
budgeted profit
vLabor turnover and the cost of recruitment and training of new
employees.
vTotal cost

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 For computing the operating cost, it is necessary
to decide first, about the unit for which the cost
is to be computed, this may often require the
study of some technical and operating data, for
finding out the factors which have a bearing on
cost.

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For preparing a cost sheet
under operating cost , costs
are usually accumulated for a
specified period viz., a
month, a quarter or a year
etc.

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Fixed costs Variable costs Semi-variable
costs

1 Also known as 1 Also known as 1 Also known as

standing running maintenance
charges charges charges

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UNIT COST

ABSOLUTE/COMMERCIAL

STANDARD LOAD

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+#,23*45

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