PPT: Introduction to Cost and Management Accounting | Cost and Management Accounting for CA Intermediate PDF Download

 Page 1


Cost accounting
• Cost accounting is a system for recording data 
and producing information about costs for the 
products produced by an organization.
• It is also used to establish costs for particular 
activities or responsibility centers.
Page 2


Cost accounting
• Cost accounting is a system for recording data 
and producing information about costs for the 
products produced by an organization.
• It is also used to establish costs for particular 
activities or responsibility centers.
• The Chartered Institute of Management
Accountants, U.K. (CIMA) defines costing as
‘the technique and process of ascertaining
costs.’
• Wheldon has defined Costing as “the proper
allocation of expenditure and involves the
collection of costs for every order, job,
process, service or unit”
Cost accounting
Page 3


Cost accounting
• Cost accounting is a system for recording data 
and producing information about costs for the 
products produced by an organization.
• It is also used to establish costs for particular 
activities or responsibility centers.
• The Chartered Institute of Management
Accountants, U.K. (CIMA) defines costing as
‘the technique and process of ascertaining
costs.’
• Wheldon has defined Costing as “the proper
allocation of expenditure and involves the
collection of costs for every order, job,
process, service or unit”
Cost accounting
Why organization need costing 
systems
Type of information provided by a costing system and its need:
1. Actual unit cost:
used for cost control,
planning future unit cost,
pricing and production level decisions.
Provide information that management needs to plan and 
control
Page 4


Cost accounting
• Cost accounting is a system for recording data 
and producing information about costs for the 
products produced by an organization.
• It is also used to establish costs for particular 
activities or responsibility centers.
• The Chartered Institute of Management
Accountants, U.K. (CIMA) defines costing as
‘the technique and process of ascertaining
costs.’
• Wheldon has defined Costing as “the proper
allocation of expenditure and involves the
collection of costs for every order, job,
process, service or unit”
Cost accounting
Why organization need costing 
systems
Type of information provided by a costing system and its need:
1. Actual unit cost:
used for cost control,
planning future unit cost,
pricing and production level decisions.
Provide information that management needs to plan and 
control
Why organization need costing 
systems
Type of information provided by a costing system and its need:
2. Actual cost of operating a department:
used for cost control by comparing with a predetermined,
budget planning future budget cost.
Provide information that management needs to plan and 
control
Page 5


Cost accounting
• Cost accounting is a system for recording data 
and producing information about costs for the 
products produced by an organization.
• It is also used to establish costs for particular 
activities or responsibility centers.
• The Chartered Institute of Management
Accountants, U.K. (CIMA) defines costing as
‘the technique and process of ascertaining
costs.’
• Wheldon has defined Costing as “the proper
allocation of expenditure and involves the
collection of costs for every order, job,
process, service or unit”
Cost accounting
Why organization need costing 
systems
Type of information provided by a costing system and its need:
1. Actual unit cost:
used for cost control,
planning future unit cost,
pricing and production level decisions.
Provide information that management needs to plan and 
control
Why organization need costing 
systems
Type of information provided by a costing system and its need:
2. Actual cost of operating a department:
used for cost control by comparing with a predetermined,
budget planning future budget cost.
Provide information that management needs to plan and 
control
Why organization need costing 
systems
Type of information provided by a costing system and its need:
3.Forecast costs: 
planning,
decision making,
cost control by comparing actual cost with the 
forecast. 
Provide information that management needs to plan and 
control