Cost Accounting CIA-1 COMP A

4. Cost classification and subdivision Cost accounting allows us to describe costs by department, process, product, activity, and service, simply add up any organization's net profit or loss figures without any cost classification or sub-division. 5. Determine an appropriate selling price In difficult marketing conditions or during a slump, costing can assist in determining the best selling price for a product, one that is neither too high nor too cheap. 6. A fair comparison Cost accounting allows us to compare products and services within and outside of an organization to market-available products and services. It also aids in achieving the lowest product cost while maintaining the highest level of operational efficiency.

ADDITIONAL COSTS INCLUDE: FUEL = RS. 800 / CYLINDER = 16.20KG OUR USAGE = 10 gms = 4.60 2. LABOUR (ASSUMPTION) = 300/ DAY = 17.22 / DAY TOTAL COST WILL COME UPTO 89.73 (RS. 90 APPROX) FOR 2 SERVINGS. &nbsp;The cost incurred for 1 glass of Special Banana shake at home as 83. Whereas the cost incurred in the eating joint is Rs. 115 The difference comes up to 32.

A product goes through different stages, each of which includes a number of processes. Purchasing materials necessitates a financial investment. The cost of the factory, the cost of converting raw materials into completed goods, and the cost of selling and distribution all add up to the overall cost. Cost is a deciding factor when considering the selling price in all of these processes. The cost of sales takes into account all relevant costs, such as manufacturing, marketing, and sales, as well as logistics. The cost of production is included in the cost of the product. The selling price is a combination of profit and production costs.

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ADVANTAGES OF COST ACCOUNTING . . . . . . . . . . ACTIVITY DETAILS . . . . . . . . . . . ACTIVITY OBSERVATIONS . . . . . . . . . . . . . KEY LEARNINGS. . . . . . . . . . . . . . . . . .

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1. Cost accounting can lead to significant savings. The potential to lower costs and enhance cost-efficiency without reducing production is perhaps the most significant benefit of introducing cost accounting. It can assist uncover waste elements like wasted time or excess resources by streamlining procedures. You'll be able to save money and increase the efficiency of your operations by doing so. 2. An effective budget plan is built on the foundation of cost accounting. Budgeting is the most important component of resource planning, and cost accounting is the bedrock of any effective budget. It can serve as a framework for calculating the true costs of all business operations, each department's costs, operating costs, and production costs. These can be combined to provide accurate information for company's budgeting. 3. Cost accounting can help you make better decisions. You can comprehensively assess all tactics within your organisation using cost accounting, including cost-volume-profit analysis, investment appraisals, level of production, and product profitability. This can help with decision-making since precise assessments of all financial aspects will drive financial decisions. Making a decision on whether to manufacture or buy from a third party Costing data assists management in determining if in-house manufacture of a product is lucrative or whether it is more cost effective to purchase the product from a third party. As a result, management can avoid incurring significant losses as a result of poor decisions.

SELLING PRICE: A product's or service's selling price is the amount a buyer pays for it. The pricing is determined by how much consumers are prepared to pay, how much the seller is willing to accept, and how competitive the price is in contrast to other firms in the market. Market price, list price, and standard pricing are all terms used to describe the selling price. In addition, the following elements aid in determining the selling price of a company's goods: ·&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The amount a buyer is willing to pay for a product. ·&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The amount a seller is inclined to accept as payment. ·&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The market price that is competitive COST PRICE: The sum it costs a producer to create a product or offer a service is known as the cost price. A cost price covers all costs associated with manufacturing, such as property, materials, electricity, research and development, testing, worker pay, and everything else that must be paid. DIFFERENCE BETWEEN THE BOTH Cost Price: The cost price of an item is the amount spent to acquire it or the price at which it is manufactured. C.P. is an abbreviation for cost price. Selling Price: The selling price of an item is the price at which it is sold. The selling price is denoted by the letters S.P. The cost price is the amount we spend to purchase an item at its current price. Similarly, the Selling Price, abbreviated as SP, is the rate at which a product is sold. The difference between the cost price (C.P.) and the selling price (S.P.) of an object is called loss if the selling price (S.P.) is less than the cost price (C.P.).&nbsp;

AIM: To Analyse both Eatery’s and Homemade Food/Beverage and to make a report out of it. Recording cost spending of direct and indirect materials of both of the ways in a cost sheet and to find out which is the best way in terms of costing and expenses. EATING JOINT: THE LONDON SHAKES BEVERAGE CHOSEN: SPECIAL BANANA MILKSHAKE HOW I MADE IT IN HOME: ·&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Bought Ripe Bananas ·&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Bought Sugar, ice cream, milk, dry fruits, chocolate syrup and all other necessary ingredients for the shake for the homemade one. ·&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Went to Market and bought readymade special Banana Shake. ·&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Made Banana Shake at home with the same ingredients. ·&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Prepared cost sheet and analysed both the ways. ·&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Made report and e-book on the basis of both the outcomes. ·&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Analysed home and Eatery’s expenses by doing all the activities mentioned above.

200 ML MILK 2 TBS SUGAR 2 BANANAS 20 GMS DRY FRUITS 10 GMS CHOCOLATE SYRUP 1 CUP VANILLA ICE CREAM

PROFIT MARGIN OF THE EATERY: Factors affecting the cost of eating joint ·&nbsp;&nbsp;&nbsp;Prime cost ·&nbsp;&nbsp;&nbsp;Work Cost ·&nbsp;&nbsp;&nbsp;Administrative Overhead ·&nbsp;&nbsp;&nbsp;Selling overheads

Cia -1 Component A 20111126_Nandini Sinha

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FUEL, GAS = FUEL = RS. 800 / CYLINDER = 16.50KG OUR USAGE = 10 gms = Rs.4.60 There are no administration and selling overheads incurred while recreating food at home.