The Institute of Cost and Management Accountants (ICMA), London f defines cost as “The amount of expenditure (actual or notional) incurred on a attributable to a given thing”. Actually, cost represents a sacrifice a foregoing or release of something of value for a product or service.
Cost Accounting is the accounting process to determine cost of product manufactured and services rendered. It records, classifies, analyses and allocates expenditure for ascertaining and controlling costs.
Some important definitions of Cost Accounting are given below:
Chartered Institute of Management Accountant (U.K.) defines Col Accounting as “The process of accounting for cost from the point at which expenditure is incurred or committed to the establishment of its ultimate relationship with cost centers and cost units”.
According to C. Gilleapic “Cost accounting is a set of procedure for determining the cost of a product and various activities involved in its manufacture and sales and for planning and measuring performance”.
According to Institute of Cost and Management Accountants, (1CMA) “Cost Accounting is that part of Management Accounting which establishes budgets and standard cost and actual cost of operations, processes, departments or products and the analysis of various profitability or social use of funds”.
Costing is the technique and method used to ascertain cost.
A few definitions of Costing are as follows:
Costing has been defined by the ICMA as “The technique and process of ascertaining cost”. It consists of principles and rules for ascertaining cost.
In the words of Harold J. Weldon “Costing is the classifying, recording and appropriate allocation of expenditure for the determination of the cost of products or services; and for presentation of suitably arranged data for the purpose of control and guidance of the management”.
The ICMA defines Cost Accountancy as “The application of costing and Cost Accounting principles, methods and techniques to the science, art and practice of cost control and ascertainment of profitability as well as the presentation of information for the purpose of managerial decision”. It is the science, art and practice of cost accountant.