Overview

Meaning of unit costingContents: 1. It is a method of costing used in industry. 2. Where production of single product and continuous production. 3. Total cost and cost per unit of output is ascertained. 4. One of the simplest method of costing. 5. To ascertain the profit or loss on production.Different methods of cost accounting:1) Unit costing method 2) Contract costing method 3) Job costing method 4) Process costing method5) Batch costing method 6) Operating costing method 7) Multiple costing method8) Departmental costing method 9) Cost plus method10) Target costing methodCharacteristics of Unit CostingObjectives of Unit CostingMethod of Unit CostingCalculation of material consumed or Material usedITEMS NOT TO BE INCLUDED IN COST ACCOUNTS:[A] Financial Incomes: i. Dividend and interest received ii. Rent received iii. Profit on sale of assets and investments iv. Share transfer fees v. Commission received vi. Dividend received vii. Brokerage, Commission and Discount Received viii. Interest on Investment[B] Financial Expenses:i. Interest on Debenture ii. Cash Discount iii. Interest on capital iv. Compensation payable to Employees v. Interest on Loan vi. Loss on sale of Assets and Investments vii. Penalties and Fines viii. Underwriting Commission ix. Discount on shares and Debenture x. Expenses on Issue of shares[C] Appropriation of Profits: i. Income Tax and Wealth Tax ii. Dividend Paid iii. Donations iv. Preliminary Expenses v. Transfer to Sinking Fund[D] Abnormal Items: i. Abnormal Loss of materials, Labours, and Assets ii. Abnormal Idle Time iii. Abnormal Bad Debts iv. Loss in the Value of Machinery and Plant due to ObsolescenceStatement of CostCost SheetDifference between Cost Sheet and Statement of CostTender PriceContents: 1. Tender statement is a cost sheet 2. Which shows estimated cost of production 3. And a reasonable amount of profit.Meaning of Tender PriceDifferent types of estimated cost sheet for tender priceTypes of Overhead: (A) On the basis of Nature(B) On the basis of FunctionClassification on the basis of NatureExample of fixed overhead and variable overheadExample of semi-variable overhead

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