A budgetary control is one of the important tools of control. It involves a constant checking and evaluation of actual with the budgeted figures in order to take corrective action where ever necessary. The Written form of forecasts made in respect of various functional activities of a business concern is called a budget. When the […]
Everything you need to know about methods of inventory control. Inventory valuation affects the profitability, the business unit must take enough care to ascertain the correct value of inventory. To ensure this, the method of valuing the inventory should not be changed from year to year. Inventory includes stock of raw materials, work-in-progress, finished products […]
Everything you need to know about types of budget. Budgets are prepared for every business function such as sales, production, purchases, personnel, finance, etc. As such, they are called functional budgets. In fact, every department of a business concern is expected to perform a particular function. Budgeting is a comprehensive exercise. It extends throughout the […]
The fixation of maximum level of an inventory item requires information about its-re-order level. The re-order level itself depends upon its maximum rate of consumption and maximum delivery period. It in fact is the product of maximum consumption of inventory item and its maximum delivery period.
Essential requirements of material control in cost accounting. Proper co-ordination of all departments involved viz., finance, purchasing, receiving, inspection, storage, accounting and payment.
Last-in-First out method (LIFO) – It is a method of pricing the issues of materials. This method is based on the assumption that the items of the last batch (lot) purchased are the first to be issued.
The Chartered Institute of Management Accountants has defined a code as ” a system of symbols designed to be applied to a classified set of items to give a brief account reference , facilitating entry collation and analysis”
Cost Accounting is a branch of accounting, which has been developed because of the limitations of Financial Accounting from the point of view of management control and internal reporting.
Following reports may be provided by a Cost Accounting Department for the use of its executives: Cost sheets setting out the total cost, analyzed into various elements, giving comparative figures for the previous period and for other plants under the same management.
Management of business concerns expects from Cost Accounting a detailed cost information in respect of its operations to equip their executives with relevant information required for planning, scheduling, controlling and decision making.