Cost Accounting Assignment Help
Perhaps one of the most hard-to-understand concepts regarding finance and accounting is the concept of cost and how it is eventually determined. Therefore, we, GoAssignmentHelp.com, offer impeccable and immaculate Cost Accounting Assignment help, which is prepared by our panel of expert accountants. Here, we give you an in-depth overview regarding the myriad concepts that are related to cost and cost accounting.
Definition of Cost
Cost, which is an intriguing concept in accounting and economics, cannot be explained in any short-cut ways to effectively comprehend it. In accounting, cost refers to the monetary value of the total amount of expenses for supplies, products, equipment, services, labor, and other items bought for use by a company or business or any item bought for use by the business. Please note that is one of the many definitions of cost and subsequent cost accounting.
Fundamental Elements of Cost
Arguably, the most important exercise of costing is to fix the cost of goods sold (COGS). To determine COGS, we must comprehend the three fundamental elements of costing, which are mentioned below.
- Direct Labor Cost
The total cost of the work executed by workers who are involved in manufacturing a product is called direct labor cost.
- Direct Raw Material Cost
Direct raw material cost refers to the total cost of raw materials that are directly involved in the process of manufacturing a specific product.
- Overhead Costs related to Manufacturing
Manufacturing Overhead Cost (MOH) is the total of entire costs related to the cost object; however, it cannot be traced back directly to the cost object in a feasible way in terms of economics. That being said, it needs to be added to the overall cost to generate profits.
How to Calculate COGS?
COGS or cost of goods sold is an intriguing concept in accounting, and as accounting students, you are required to solve complex problems related to COGS in a jiffy. Our cost accounting help can guide you in solving such problems. COGS is in reference to the carrying value of the products that are sold in the market. To calculate the cost of goods sold pertaining to a specific product, you must mug up a few basic steps.
Step 1: You must have knowledge of the number of units that are manufactured and the overall costs of such items per unit.
Step 2: To compute the total number of units that are manufactured, begin with the number of units at the start of the work in process. Add this number to the total number of units that are produced and finally subtract the total amount of units at the end of the work process. The following formula makes it easier to comprehend:
Number of units at the start of the work in process + Total number of units that are manufactured – Total number of units ending in the process = Total number of units that are manufactured
Step 3: By the above formula, you have the total number of units that are eventually manufactured. Next, you must calculate the total cost of goods that are manufactured.
Step 4: Because you have the total number of units and total cost of goods that are manufactured, divide them to obtain the COGS per unit.
Types of Cost along with Examples
A comprehensive list of the various types of cost along with examples is given below in tabular format.
Types of Cost
The cost that is directly involved in the actual manufacturing of goods or providing a service is called the actual cost to the company.
Raw material cost and wage bills
This cost refers to the cost of the economic endeavor not undertaken to produce present goods and services. In simpler terms, opportunity cost refers to the value of the most optimum alternative or the total value of opportunities lost.
Suppose a business has a specific area of land at its disposal but is presently not using it. The entity could have rented out that land and earned money. However, because the company is not doing so, the cost of such an unutilized chance is called as opportunity cost.
Those specific costs that do not vary or alter because of nature of the business activity or level are called sunk costs. Sometimes, they are referred to as unavoidable or inescapable costs.
Incremental costs are the exact opposite of sunk costs. Costs that vary or increase based on the changes in business activities are called incremental costs.
Costs that are incurred due to alterations in the distribution network or costs incurred because of product recall
Also known as paid-out costs, explicit costs refer to those costs that are paid by the firm.
Payment of interest on borrowed capital, payment of rent, and so on
Implicit costs are those costs which are not mentioned in books of accounting. However, they influence a company’s business decisions.
Interest paid on equity capital, Depreciation costs on property that are still in use, and Rent on idle land
Book costs are those costs that are not directly paid but provisions are made for such costs in the profit and loss statements that are generated.
Unpaid amount on owner’s capital and provision for depreciation
This cost is predominantly an outlay cost that is already incurred on a specific process or mode of production.
Sunk costs are also referred to as accounting costs
Future costs not yet incurred but which play a significant role in business decisions are known as economic costs.
Economic costs are quite similar in comparison with implicit and opportunity costs
Costs that are directly related to manufacture or unit of operation are called direct costs.
Cost of raw material
The costs that are related to the process of production but is not directly accountable to the cost object are called indirect costs.
Cost of land use and machinery
Definition of Cost Accounting
To write an engaging and compelling Cost Accounting Assignment, you must know cost accounting inside-out, beginning with its definition.
Cost accounting is a process that primarily aims to determine a business’s total cost of production by effectively assessing input costs of each step of production as well as fixed costs, such as depreciation cost related to capital equipment.
Benefits of Cost Accounting
Cost accounting comes to the aid of companies and businesses in several ways:
- Standard cost accounting is a basic process that considers diverse aspects of the cost of a specific product, be it direct, indirect, or may be overhead costs.
- Incremental and marginal costs can be considered if there is any alteration in the process of production.
- Certain principles of accounting such as Life Cycle assessment and environmental accounting help businesses in the long run.
- Finally, all accounting elements are dealt with separately, such as a cost of raw material, land, and labor, thereby assisting businesses and companies to develop exclusive financial policies.
Cost Accounting Types
- Standard (or Standardized) Cost Accounting
Standard accounting practices are derived historically and are in accordance with Generally Accepted Accounting Principles (GAAP). In standard cost accounting, fixed costs are eventually calculated with variable costs.
- Environmental Accounting
This branch of cost accounting considers both environmental and economic info during the process of formulating costs of goods.
- Lifecycle Assessment
Lifecycle assessment or LCA is a specialized form of environmental accounting that considers potential increase in environment costs that could occur through a product’s lifecycle.
- Resource Consumption Accounting
This is a German-based accounting practice that provides managers information support regarding a business enterprise’s optimization.
- Target Costing
Target costing is a method of pricing utilized by firms. It can be accurately defined as the maximum cost amount that can be effectively incurred on a product, with the firm earning the required profit margin.
- Activity-based Accounting
Activity-based accounting, which is also known as ABC, is yet another accounting practice that accurately assigns the overall cost of each activity with resources to all services and products, according to the precise consumption by each. Hence, it assists in separating three types of cost: fixed cost, overhead cost, and variable cost.
- Lean Accounting
Lean accounting is basically an accounting practice that is associated with lean businesses. A lean enterprise had its origins in postwar Japan to tackle wastage that is associated with the manufacturing process. The primary purpose of lean accounting is to effectively support a lean enterprise.
Management Accounting Assignment Help
Management Accounting Assignment Help pertains to management accounting, which is the provision of financial information and data to an organization for use in the growth and development of its business.
Accounting Assignment Help
Accounting Assignment Help pertains to the subject of accounting, which is a systematic process used to identify, record, measure, classify, verify, summarize, interpret, and communicate financial information. Our accounting assignment help is a topnotch service that we are renowned for.
How does GoAssignmentHelp help students in writing a Cost Accounting Assignment?
All Cost Accounting Assignments undertaken by GoAssignmentHelp are written by PhD-qualified experts in this exclusive field. Thus, you can expect better grades for sure upon submission of the assignment. What’s more, we have in place state-of-the-art tools to crosscheck on plagiarism and other errors related to grammar, punctuation and spelling, the result being a 100% original and error-free assignment. To top it all, we offer 24/7 support, quick turnaround time, affordable pricing, and strict adherence to deadlines. Lastly, we offer end-to-end help with all aspects surrounding cost accounting, be it lean accounting or target costing.