General Ledger & Factory Ledger

The topics of Basic Entries and General & Factory Ledger are inter-related. It is assumed that you have learned how to pass Basic Entries. If you haven’t then Click Here and Learn them Continue reading “General Ledger & Factory Ledger” →

October 8th, 2009 | Category: Cost Accounting, Job Order Costing | Comments are closed

Marginal Costing

This is an important but easy topic. This is easy because the only thing which you will have to take care about is the format of the P&L Account/ Income Statement, which is pretty consistent and is given below.

What is the difference between Marginal and Absorption Costing?
The difference between these two is that in marginal costing, Fixed FOH is not made the part of the cost of production (hence fixed cost does not become the part of Stock also. This point is clearly express below in the tutorial), where as in Absorption costing Fixed FOH is the included in the cost of production.

You can download this Tutorial by right clicking on the picture and save target as

Continue reading “Marginal Costing” →

October 8th, 2009 | Category: Cost Accounting | Comments are closed

General Ledger Factory Ledger Part 2

This is part 2 of the topic “General and Factory Ledger”. To see part1 click here.

If you face difficulty in reading the following notes, click on it for larger picture.

You can download this Tutorial by right clicking on the picture and save target as Continue reading “General Ledger Factory Ledger Part 2” →

October 8th, 2009 | Category: Cost Accounting, Job Order Costing | 2 comments

Functional Budgets Part 2

This is the second part of the topic. To see First part, click here.You can download this Tutorial by right clicking on the picture and save target as Continue reading “Functional Budgets Part 2” →

October 8th, 2009 | Category: Budgeting, Cost Accounting | 2 comments

Functional Budgets

What is budgeting?
Budgeting is done for future. In budgeting we plan for the future. It should be noted that budget is only an estimate, and actual results might be different from budget. Continue reading “Functional Budgets” →

October 8th, 2009 | Category: Budgeting, Cost Accounting | One comment - (Comments are closed)

Economic Order Quantity

What is Economic Order Quantity?
There are two costs attached to stock:

1) Ordering Cost : All cost which are incurred during the ordering of stock, like phone calls, transportation cost etc

2) Holding Cost : Storage costs, like rent of the building etc. Continue reading “Economic Order Quantity” →

October 8th, 2009 | Category: Cost Accounting, Material | 5 comments

Defective And Spoiled Goods

What is the Difference in Defective Goods and Spoiled Goods?

There is a fundamental difference between the two. A defective good is a good in which there is a manufacturing fault or defect, but this fault can be removed by applying additional cost called rectification cost.

Whereas in case of Spoiled goods, the goods have been spoiled or destroyed, and can not be repaired. So it will be sold as a scrape Continue reading “Defective And Spoiled Goods” →

October 8th, 2009 | Category: Cost Accounting, Material | 4 comments - (Comments are closed)

Decision Making Chart

Decision Making is the favorite topic of the examiners, and tested quite frequently. Continue reading “Decision Making Chart” →

October 8th, 2009 | Category: Cost Accounting, Decision Making | 2 comments
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