Introduction to Cost Accounting

In your own words, define cost accounting.

• Cost accounting involves tracking and managing costs to improve efficiency and profitability.
• Cost accounting is only relevant for large corporations
• Cost accounting focuses on increasing expenses
• Cost accounting is primarily used for marketing purposes

What are the disadvantages of a company, which does not prepare Cost Accounting?

• Inaccurate pricing decisions, inability to track and control costs effectively, lack of insight into profitability of products/services, challenges in budgeting and forecasting
• Improved financial performance
• Enhanced decision-making process
• Increased efficiency in cost management

What are the differences between cost accounting and financial accounting?

• Cost accounting is used for external reporting, while financial accounting focuses on internal costs.
• Cost accounting and financial accounting both serve the same purpose within an organization.
• Cost accounting is only concerned with short-term financial decisions, while financial accounting looks at long-term strategies.
• Cost accounting focuses on internal costs and is used for decision-making within the organization, while financial accounting is concerned with external reporting to stakeholders.

What is Cost Accounting?

• Cost Accounting is a branch of marketing
• Cost Accounting deals with environmental sustainability
• Cost Accounting focuses on human resources management
• Cost Accounting is a branch of accounting that deals with the recording, analysis, and reporting of costs associated with a business operation.

List three roles of cost accounting to the management

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• cost accounting provide profit to the management

• Assisting in decision-making
• Forecasting future costs
• Providing entertainment to employees

Financial Accounting is the process of:

• Classified

• Record

• Present

• Interprets transactions

What is meant by direct and indirect cost?

• Direct costs are fixed expenses, while indirect costs are variable expenses.
• Direct costs are long-term expenses, while indirect costs are short-term expenses.
• Direct costs are expenses directly related to a specific cost object, while indirect costs are expenses not directly tied to a specific cost object.
• Direct costs are related to production, while indirect costs are related to marketing.

How could you classify the following in terms of fixed, variable or semi-variable costs? a) directs materials b) insurance on factory building c) direct labour

• a) Variable, b) Fixed, c) Variable,

• Variable b) variable, c) Variable,

• Fixed
• Variable

State the relationship between factory organization and costing system.

• The relationship between factory organization and costing system is that the structure of the factory influences how costs are allocated and tracked.
• Factory organization has no impact on costing systems
• Costing systems are not influenced by the structure of the factory
• Factory organization and costing system are completely unrelated

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