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Ledger - Cost Accounting Techniques, Cost Accounting Video Lecture | Cost Accounting - B Com

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FAQs on Ledger - Cost Accounting Techniques, Cost Accounting Video Lecture - Cost Accounting - B Com

1. What are some common cost accounting techniques used in ledger management?
Ans. Some common cost accounting techniques used in ledger management include activity-based costing, standard costing, job costing, process costing, and marginal costing. These techniques help businesses accurately allocate costs, track expenses, and make informed financial decisions.
2. How does activity-based costing (ABC) work in cost accounting?
Ans. Activity-based costing (ABC) is a cost accounting technique that assigns costs to specific activities and then allocates them to products or services based on their actual consumption of these activities. Unlike traditional costing methods, ABC provides a more accurate understanding of the true costs associated with each product or service, helping businesses identify areas for cost reduction and improve profitability.
3. What is the difference between standard costing and actual costing in cost accounting?
Ans. Standard costing involves setting predetermined standards for costs, such as labor and materials, and comparing them to actual costs incurred during production. It helps businesses measure and control costs by identifying variances between standard and actual costs. On the other hand, actual costing involves capturing the exact costs incurred for each product or service, providing a more precise reflection of the actual expenses incurred in the production process.
4. How does job costing work in cost accounting?
Ans. Job costing is a cost accounting technique used to determine the cost of producing a specific job or project. It involves allocating direct and indirect costs to individual jobs based on their unique characteristics, such as materials used, labor hours, and overhead expenses. Job costing provides businesses with insights into the profitability of each job and helps them make pricing decisions and manage resources effectively.
5. What is marginal costing and how does it contribute to cost accounting?
Ans. Marginal costing is a cost accounting technique that focuses on analyzing the impact of changes in production volume on costs and profits. It separates fixed and variable costs, allowing businesses to calculate the contribution margin of each unit produced. Marginal costing helps in making short-term decisions such as pricing, product mix, and determining the breakeven point. By understanding the marginal costs of production, businesses can optimize their operations and maximize profitability.
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