Chapter Four
Costing
Costing or Cost Accounting
Costing is the determination of an actual cost of a component after adding different
expenses increased incurred in various departments
Definition: Costing or cost accounting may be defined as a systematic procedure for
recording accurately every item of expenditure incurred on the manufacture of a
product by different sections of any manufacturing concern.
Costing or Cost Accounting
Wheldon has defined costing as, “Costing is the classifying and recording the
appropriate allocation of expenditure for the determination of the costs of products or
services, and for presentation of the costs of products or services, and for presentation of
suitably arranged data for the purpose of control, and guidance of management.
Objective of Costing or Cost Accounting
Costing Estimating
A cost estimate is an attempt to forecast the expenses that must be incurred to manufacture a
product.
Definition: Cost estimating may be defined as the process of determining the probable cost
of the product before the start of its manufacture.
Knowledge required for Cost Estimating
Importance of Cost Estimating
The accurate estimation can enable the factory owner to make vital decisions such
manufacturing and selling policies. as
Importance of Cost Estimating
Exampl
e
Objective of Cost Estimating
Functions of Cost Estimating
Types of Cost Estimates
Data Requirements for Cost Estimating
Elements of Cost Estimation / Components of a Job
Estimate / Constituents of Estimation
Elements of Cost Estimation / Components of a Job
Estimate / Constituents of Estimation
Elements of Cost Estimation / Components of a
Job Estimate / Constituents of Estimation
Elements of Cost Estimation / Components of a Job
Estimate / Constituents of Estimation
Elements of Cost Estimation / Components of a Job Estimate /
Constituents of Estimation
Difference between Cost Estimation and Cost Accounting
Cost Estimation Procedure
Cost Estimation Procedure
Cost Estimation Procedure
Cost Estimation Procedure
Cost Estimation Procedure
Cost Estimation
Determination of Direct Labour Cost
Determination of Direct Labour Cost
Determination of Direct Labour Cost
Material Cost
Direct Material Cost
Indirect Material Cost
Expenses
Direct Expenses
Indirect Expenses
Cost Ladder
Depreciation
Depreciation
Cost Ladder
Cost Ladder
Product Design and Process Selection