Cost Accounting

This category covers all kinds of cost accounting topics such as costing methods, production costing as well as other concepts in costing a product or service.

Implementation Challenges of Activity-Based Costing – What are the Pros and Cons of the ABC Method?

Activity-based costing (ABC) is a useful costing method that accounts for overheads and indirect costs. It allocates costs through identifying cost activities, cost drivers, and cost pools. The ABC method removes several inefficiencies in the traditional costing approach. However, the approach requires effective implementation and change management to achieve efficiency. Let us discuss what is …

Implementation Challenges of Activity-Based Costing – What are the Pros and Cons of the ABC Method? Read More »

Marginal Costing vs Absorption Costing

Variable or marginal costing and full or absorption costing methods are two widely used inventory costing methods. Both come with different advantages and some limitations to implement. The marginal costing method helps a company in key decisions such as operational efficiency and control measures. The absorption method allocates full production costs and offers accurate final …

Marginal Costing vs Absorption Costing Read More »

Activity-Based Costing Vs Absorption Costing

Activity-based costing is a comprehensive cost allocation method. It helps the management identify cost activities and cost drivers. ABC method serves several purposes including product costing, pricing, profitability, and customer profitability analysis. On the other hand, absorption costing is the conventional costing approach. It adds fixed overhead costs to the variable costs of production. Let …

Activity-Based Costing Vs Absorption Costing Read More »

Accounting for Joint Costs

Joints costs incur when more than one product is produced using the same resources. Companies can extract several products out of one main ingredient. Apportioning joint costs can help companies in calculating the correct selling price. Eventually, the decision can impact the company’s long-term profits. A company can use several methods to apportion joint costs. …

Accounting for Joint Costs Read More »

What is Semi Variable Cost?

A cost is an expenditure that companies must incur to produce or sell their products. It may also include investment in assets and bringing them to a usable condition. For companies, costs may come from various sources and in different forms. In management and cost accounting, analyzing costs is crucial for obtaining further information about …

What is Semi Variable Cost? Read More »

Reorder Point of Inventory

Companies that deal in physical stock must always keep their stock replenished to generate revenues. It is crucial to do so as customers will require suppliers to provide their supplies whenever needed. However, the same may not apply to all companies as some may deal on a job-basis. Nonetheless, for most other companies, maintaining a …

Reorder Point of Inventory Read More »

Scroll to Top