B Com Exam > B Com Notes > Cost Accounting > Unit Costing
Unit Costing | Cost Accounting - B Com PDF Download
| Download, print and study this document offline |
Please wait while the PDF view is loading
Page 1
UNIT 12 UNIT COSTING
Structure
12.0 Objectives
12.1 Introduction
12.2 Meaning and Applicability
12.3 Preparation of Statement of Cost/Cost Sheet
12.3.1 Ascertainment of Cost of Direct Materials
12.3.2 Ascertainment of Cost of Direct Labour
12.3.3 Ascertainment of Cost of Other Direct Expenses/hargeable Expenses
12.3.4 Ascertainment of Prime Cost
12.3.5 Ascertainment of Factory/Works Cost
12.3.6 Ascertainment of Cost of Production
12.3.7 Ascertainment of Total Cost/Cost of Sales
12.3.8 Treatment of Items of Expenses and Losses of Purely Financial Nature
12.4 Preparation of Production Account
12.5 Special Points to be Noted
12.5.1 Value of Scrap/Wastage
12.5.2 Opening and Closing Work-in-Progress
12.5.3 Opening and Closing Stocks of Finished Goods
12.5.4 Selling and Distribution Overheads
12.5.5 Computation of Recovery Rates for Overheads
12.6 Preparation of Statement of Quotation/Tendering Price
12.7 Comprehensive Illustrations
12.8 Let Us Sum Up
12.9 Key Words
12.10 Answers to Check Your Progress
12.11 Terminal Questions/Exercises
12.0 OBJECTIVES
After studying this unit, you should be able to:
? prepare cost sheet and ascertain the prime cost, the factory/works
cost, the cost of production, the cost of goods sold, the cost of sales
and profit;
? prepare production account; and
? prepare a statement of quotation and ascertain the selling price/price
of the tender.
12.1 INTRODUCTION
Unit costing is one of the most commonly used method of costing by firms
which are engaged in manufacturing products with identical units such as
Page 2
UNIT 12 UNIT COSTING
Structure
12.0 Objectives
12.1 Introduction
12.2 Meaning and Applicability
12.3 Preparation of Statement of Cost/Cost Sheet
12.3.1 Ascertainment of Cost of Direct Materials
12.3.2 Ascertainment of Cost of Direct Labour
12.3.3 Ascertainment of Cost of Other Direct Expenses/hargeable Expenses
12.3.4 Ascertainment of Prime Cost
12.3.5 Ascertainment of Factory/Works Cost
12.3.6 Ascertainment of Cost of Production
12.3.7 Ascertainment of Total Cost/Cost of Sales
12.3.8 Treatment of Items of Expenses and Losses of Purely Financial Nature
12.4 Preparation of Production Account
12.5 Special Points to be Noted
12.5.1 Value of Scrap/Wastage
12.5.2 Opening and Closing Work-in-Progress
12.5.3 Opening and Closing Stocks of Finished Goods
12.5.4 Selling and Distribution Overheads
12.5.5 Computation of Recovery Rates for Overheads
12.6 Preparation of Statement of Quotation/Tendering Price
12.7 Comprehensive Illustrations
12.8 Let Us Sum Up
12.9 Key Words
12.10 Answers to Check Your Progress
12.11 Terminal Questions/Exercises
12.0 OBJECTIVES
After studying this unit, you should be able to:
? prepare cost sheet and ascertain the prime cost, the factory/works
cost, the cost of production, the cost of goods sold, the cost of sales
and profit;
? prepare production account; and
? prepare a statement of quotation and ascertain the selling price/price
of the tender.
12.1 INTRODUCTION
Unit costing is one of the most commonly used method of costing by firms
which are engaged in manufacturing products with identical units such as
coal, bricks, shoes, sugar, cement, etc. Under this method, cost and profi t
per unit of output is ascertained by preparing monthly or quarterly cost
sheets showing details of the various components of total cost. In this unit,
you will learn how cost sheet is prepared and how cost and profit per unit of
output is determined.
12.2 MEANING AND APPLICABILITY
Unit costing refers to a method of costing used by industries engaged in
mass production of homogeneous/identical products. The basic feature of
unit costing is that the cost units are identical. Unit costing is also known
as “Single Output Costing”. Single or Output Costing is the form of Unit
costing used when the enterprise produces basically one homogeneous
product or one homogeneous product in two or more grades. Under this
method, the cost per unit is arrived at by dividing the total cost by the
total number of units produced. Thus, the cost ascertainment involves the
following two stages:
i) collection and functional analysis of all costs,
ii) division of total cost by the total number of units produced in order
to determine the cost per unit.
This procedure is applicable only when the organisation produces only one
product. If, however, the organisation produces several grades of the same
product, it becomes imperative to apportion the various costs between the
various grades so that the Cost of each grade can be determined separately
Unit costing method can be successfully applied in those industries engaged
in assembling, such as automobiles, electronics, typewriters, etc., and also
in those industries engaged in production of homogeneous products, such as
collieries, quarries, brick making, brewaries, dairies, sugar, cement works
etc.
12.3 PREPARATION OF STATEMENT OF COST/ COST
SHEET
Under this method of costing, it is customary to prepare a statement of cost
which is popularly known as ‘Cost Sheet’ at periodical intervals. It shows
detailed break-up of the total cost and the cost per unit at each stage. It
should contain as much information regarding costs as may be necessary
for the purposes of cost analysis and cost control. In actual practice, the
corresponding figures of the preceding period are also shown in the) Cost
Sheet for purposes of comparison. This facilitates cost control.
You learnt about the preparation of Cost Sheet in Unit 3 Block 1. We shall
now study about it in more detail. The proforma of Cost Sheet is given here
again in Figure 12.1.
Page 3
UNIT 12 UNIT COSTING
Structure
12.0 Objectives
12.1 Introduction
12.2 Meaning and Applicability
12.3 Preparation of Statement of Cost/Cost Sheet
12.3.1 Ascertainment of Cost of Direct Materials
12.3.2 Ascertainment of Cost of Direct Labour
12.3.3 Ascertainment of Cost of Other Direct Expenses/hargeable Expenses
12.3.4 Ascertainment of Prime Cost
12.3.5 Ascertainment of Factory/Works Cost
12.3.6 Ascertainment of Cost of Production
12.3.7 Ascertainment of Total Cost/Cost of Sales
12.3.8 Treatment of Items of Expenses and Losses of Purely Financial Nature
12.4 Preparation of Production Account
12.5 Special Points to be Noted
12.5.1 Value of Scrap/Wastage
12.5.2 Opening and Closing Work-in-Progress
12.5.3 Opening and Closing Stocks of Finished Goods
12.5.4 Selling and Distribution Overheads
12.5.5 Computation of Recovery Rates for Overheads
12.6 Preparation of Statement of Quotation/Tendering Price
12.7 Comprehensive Illustrations
12.8 Let Us Sum Up
12.9 Key Words
12.10 Answers to Check Your Progress
12.11 Terminal Questions/Exercises
12.0 OBJECTIVES
After studying this unit, you should be able to:
? prepare cost sheet and ascertain the prime cost, the factory/works
cost, the cost of production, the cost of goods sold, the cost of sales
and profit;
? prepare production account; and
? prepare a statement of quotation and ascertain the selling price/price
of the tender.
12.1 INTRODUCTION
Unit costing is one of the most commonly used method of costing by firms
which are engaged in manufacturing products with identical units such as
coal, bricks, shoes, sugar, cement, etc. Under this method, cost and profi t
per unit of output is ascertained by preparing monthly or quarterly cost
sheets showing details of the various components of total cost. In this unit,
you will learn how cost sheet is prepared and how cost and profit per unit of
output is determined.
12.2 MEANING AND APPLICABILITY
Unit costing refers to a method of costing used by industries engaged in
mass production of homogeneous/identical products. The basic feature of
unit costing is that the cost units are identical. Unit costing is also known
as “Single Output Costing”. Single or Output Costing is the form of Unit
costing used when the enterprise produces basically one homogeneous
product or one homogeneous product in two or more grades. Under this
method, the cost per unit is arrived at by dividing the total cost by the
total number of units produced. Thus, the cost ascertainment involves the
following two stages:
i) collection and functional analysis of all costs,
ii) division of total cost by the total number of units produced in order
to determine the cost per unit.
This procedure is applicable only when the organisation produces only one
product. If, however, the organisation produces several grades of the same
product, it becomes imperative to apportion the various costs between the
various grades so that the Cost of each grade can be determined separately
Unit costing method can be successfully applied in those industries engaged
in assembling, such as automobiles, electronics, typewriters, etc., and also
in those industries engaged in production of homogeneous products, such as
collieries, quarries, brick making, brewaries, dairies, sugar, cement works
etc.
12.3 PREPARATION OF STATEMENT OF COST/ COST
SHEET
Under this method of costing, it is customary to prepare a statement of cost
which is popularly known as ‘Cost Sheet’ at periodical intervals. It shows
detailed break-up of the total cost and the cost per unit at each stage. It
should contain as much information regarding costs as may be necessary
for the purposes of cost analysis and cost control. In actual practice, the
corresponding figures of the preceding period are also shown in the) Cost
Sheet for purposes of comparison. This facilitates cost control.
You learnt about the preparation of Cost Sheet in Unit 3 Block 1. We shall
now study about it in more detail. The proforma of Cost Sheet is given here
again in Figure 12.1.
Figure 12.1 : Proforma of Cost Sheet
COST SHEET OF…………………….
for the month ending ………………
Output:…………. Units
Total: Per unit
Rs. Rs.
Raw Materials Consumed
Opening Stock of Raw Materials
Add : Purchases of Raw
Materials
Less: Closing Stocks of Finished
Goods
……………
……………
__________
Direct Labour
Other Direct Expenses
……………
……………
__________
……………
……………
__________
……………
……………
__________
PRIME COST …………… ……………
Factory Overheads
………….
………….
………….
………….
………….
………….
WORKS COST …………. ………….
Office & Administrative
Overheads ………….
………….
………….
………….
………….
………….
________
……………
……………
……………
……………
……………
________
……………
_________
……………
COST OF PRODUCTION
(…………units)
…………… ……………
Add : Opening Stock of Finished
Goods
(…………units)
Less : Closing Stock of Finished
Goods
(…………units)
COST OF GOODS SOLD
(…………units)
Selling & Distribution Overheads
……………
…………..
……………
……………
……………
……………
__________
……………
_________
……………
__________
……………
__________
……………
__________
……………
__________
……………
_________
COST OF SALES
(…………units)
…………… ……………
PROFIT (LOSS)
SALES/SELLING PRICE
……………
__________
……………
___________
……………
__________
……………
__________
Page 4
UNIT 12 UNIT COSTING
Structure
12.0 Objectives
12.1 Introduction
12.2 Meaning and Applicability
12.3 Preparation of Statement of Cost/Cost Sheet
12.3.1 Ascertainment of Cost of Direct Materials
12.3.2 Ascertainment of Cost of Direct Labour
12.3.3 Ascertainment of Cost of Other Direct Expenses/hargeable Expenses
12.3.4 Ascertainment of Prime Cost
12.3.5 Ascertainment of Factory/Works Cost
12.3.6 Ascertainment of Cost of Production
12.3.7 Ascertainment of Total Cost/Cost of Sales
12.3.8 Treatment of Items of Expenses and Losses of Purely Financial Nature
12.4 Preparation of Production Account
12.5 Special Points to be Noted
12.5.1 Value of Scrap/Wastage
12.5.2 Opening and Closing Work-in-Progress
12.5.3 Opening and Closing Stocks of Finished Goods
12.5.4 Selling and Distribution Overheads
12.5.5 Computation of Recovery Rates for Overheads
12.6 Preparation of Statement of Quotation/Tendering Price
12.7 Comprehensive Illustrations
12.8 Let Us Sum Up
12.9 Key Words
12.10 Answers to Check Your Progress
12.11 Terminal Questions/Exercises
12.0 OBJECTIVES
After studying this unit, you should be able to:
? prepare cost sheet and ascertain the prime cost, the factory/works
cost, the cost of production, the cost of goods sold, the cost of sales
and profit;
? prepare production account; and
? prepare a statement of quotation and ascertain the selling price/price
of the tender.
12.1 INTRODUCTION
Unit costing is one of the most commonly used method of costing by firms
which are engaged in manufacturing products with identical units such as
coal, bricks, shoes, sugar, cement, etc. Under this method, cost and profi t
per unit of output is ascertained by preparing monthly or quarterly cost
sheets showing details of the various components of total cost. In this unit,
you will learn how cost sheet is prepared and how cost and profit per unit of
output is determined.
12.2 MEANING AND APPLICABILITY
Unit costing refers to a method of costing used by industries engaged in
mass production of homogeneous/identical products. The basic feature of
unit costing is that the cost units are identical. Unit costing is also known
as “Single Output Costing”. Single or Output Costing is the form of Unit
costing used when the enterprise produces basically one homogeneous
product or one homogeneous product in two or more grades. Under this
method, the cost per unit is arrived at by dividing the total cost by the
total number of units produced. Thus, the cost ascertainment involves the
following two stages:
i) collection and functional analysis of all costs,
ii) division of total cost by the total number of units produced in order
to determine the cost per unit.
This procedure is applicable only when the organisation produces only one
product. If, however, the organisation produces several grades of the same
product, it becomes imperative to apportion the various costs between the
various grades so that the Cost of each grade can be determined separately
Unit costing method can be successfully applied in those industries engaged
in assembling, such as automobiles, electronics, typewriters, etc., and also
in those industries engaged in production of homogeneous products, such as
collieries, quarries, brick making, brewaries, dairies, sugar, cement works
etc.
12.3 PREPARATION OF STATEMENT OF COST/ COST
SHEET
Under this method of costing, it is customary to prepare a statement of cost
which is popularly known as ‘Cost Sheet’ at periodical intervals. It shows
detailed break-up of the total cost and the cost per unit at each stage. It
should contain as much information regarding costs as may be necessary
for the purposes of cost analysis and cost control. In actual practice, the
corresponding figures of the preceding period are also shown in the) Cost
Sheet for purposes of comparison. This facilitates cost control.
You learnt about the preparation of Cost Sheet in Unit 3 Block 1. We shall
now study about it in more detail. The proforma of Cost Sheet is given here
again in Figure 12.1.
Figure 12.1 : Proforma of Cost Sheet
COST SHEET OF…………………….
for the month ending ………………
Output:…………. Units
Total: Per unit
Rs. Rs.
Raw Materials Consumed
Opening Stock of Raw Materials
Add : Purchases of Raw
Materials
Less: Closing Stocks of Finished
Goods
……………
……………
__________
Direct Labour
Other Direct Expenses
……………
……………
__________
……………
……………
__________
……………
……………
__________
PRIME COST …………… ……………
Factory Overheads
………….
………….
………….
………….
………….
………….
WORKS COST …………. ………….
Office & Administrative
Overheads ………….
………….
………….
………….
………….
………….
________
……………
……………
……………
……………
……………
________
……………
_________
……………
COST OF PRODUCTION
(…………units)
…………… ……………
Add : Opening Stock of Finished
Goods
(…………units)
Less : Closing Stock of Finished
Goods
(…………units)
COST OF GOODS SOLD
(…………units)
Selling & Distribution Overheads
……………
…………..
……………
……………
……………
……………
__________
……………
_________
……………
__________
……………
__________
……………
__________
……………
__________
……………
_________
COST OF SALES
(…………units)
…………… ……………
PROFIT (LOSS)
SALES/SELLING PRICE
……………
__________
……………
___________
……………
__________
……………
__________
Look at Illustration 1 and see how Cost Sheet is prepared from the given
data.
Illustration 1: In a factory 20,000 units of Product X were manufactured
in the month of September, 2018. From the following figures obtained from
the costing records, prepare a Cost Sheet showing the total cost and cost per
unit:
Rs.
Direct Material Consumed
Direct Wages
Other Direct Expenses
Factory Overheads
Office & Administrative Overheads
Selling & Distribution Overheads
2,00,000
1,60,000
40,000
80,000
60,000
60,000
Solution:
Cost Sheet of Product ‘X’ for the Month of September, 2018
Output : 20,000 units
Total Cost
Rs.
Cost Per unit
Rs.
Cost of Direct Materials 2,00,000 10.00
Cost of Direct Labour 1,60,000 8.00
Cost of Other Direct Expenses 40,000 2.00
PRIME COST 4,00,000 20.00
Add Factory Overheads 80,000 4.00
FACTORY/WORKS COST 4,80,000 24.00
Add : Office & Administrative
Overheads
60,000 3.00
COST OF PRODUCTION 5,40,000 27.00
Add: Selling & Distribution
Overheads
60,000 3.00
TOTAL COST/COST OF SALES 6,00,000 30.00
Note: Cost per unit for each component of total cost has been arrived at by
dividing the amount by the total output.
12.3.1 Ascertainment of Cost of Direct Materials
While considering the cost of direct materials, only the cost of direct materials
actually used or consumed should be taken into account. Normally, all the
raw materials purchased in a particular period are not consumed during the
same period. Certain amount of raw materials is always kept in stock so that
production may not be interrupted for want of materials. In most cases, the
cost of direct materials actually used in production is not given. It should be
determined in the following manner:
Page 5
UNIT 12 UNIT COSTING
Structure
12.0 Objectives
12.1 Introduction
12.2 Meaning and Applicability
12.3 Preparation of Statement of Cost/Cost Sheet
12.3.1 Ascertainment of Cost of Direct Materials
12.3.2 Ascertainment of Cost of Direct Labour
12.3.3 Ascertainment of Cost of Other Direct Expenses/hargeable Expenses
12.3.4 Ascertainment of Prime Cost
12.3.5 Ascertainment of Factory/Works Cost
12.3.6 Ascertainment of Cost of Production
12.3.7 Ascertainment of Total Cost/Cost of Sales
12.3.8 Treatment of Items of Expenses and Losses of Purely Financial Nature
12.4 Preparation of Production Account
12.5 Special Points to be Noted
12.5.1 Value of Scrap/Wastage
12.5.2 Opening and Closing Work-in-Progress
12.5.3 Opening and Closing Stocks of Finished Goods
12.5.4 Selling and Distribution Overheads
12.5.5 Computation of Recovery Rates for Overheads
12.6 Preparation of Statement of Quotation/Tendering Price
12.7 Comprehensive Illustrations
12.8 Let Us Sum Up
12.9 Key Words
12.10 Answers to Check Your Progress
12.11 Terminal Questions/Exercises
12.0 OBJECTIVES
After studying this unit, you should be able to:
? prepare cost sheet and ascertain the prime cost, the factory/works
cost, the cost of production, the cost of goods sold, the cost of sales
and profit;
? prepare production account; and
? prepare a statement of quotation and ascertain the selling price/price
of the tender.
12.1 INTRODUCTION
Unit costing is one of the most commonly used method of costing by firms
which are engaged in manufacturing products with identical units such as
coal, bricks, shoes, sugar, cement, etc. Under this method, cost and profi t
per unit of output is ascertained by preparing monthly or quarterly cost
sheets showing details of the various components of total cost. In this unit,
you will learn how cost sheet is prepared and how cost and profit per unit of
output is determined.
12.2 MEANING AND APPLICABILITY
Unit costing refers to a method of costing used by industries engaged in
mass production of homogeneous/identical products. The basic feature of
unit costing is that the cost units are identical. Unit costing is also known
as “Single Output Costing”. Single or Output Costing is the form of Unit
costing used when the enterprise produces basically one homogeneous
product or one homogeneous product in two or more grades. Under this
method, the cost per unit is arrived at by dividing the total cost by the
total number of units produced. Thus, the cost ascertainment involves the
following two stages:
i) collection and functional analysis of all costs,
ii) division of total cost by the total number of units produced in order
to determine the cost per unit.
This procedure is applicable only when the organisation produces only one
product. If, however, the organisation produces several grades of the same
product, it becomes imperative to apportion the various costs between the
various grades so that the Cost of each grade can be determined separately
Unit costing method can be successfully applied in those industries engaged
in assembling, such as automobiles, electronics, typewriters, etc., and also
in those industries engaged in production of homogeneous products, such as
collieries, quarries, brick making, brewaries, dairies, sugar, cement works
etc.
12.3 PREPARATION OF STATEMENT OF COST/ COST
SHEET
Under this method of costing, it is customary to prepare a statement of cost
which is popularly known as ‘Cost Sheet’ at periodical intervals. It shows
detailed break-up of the total cost and the cost per unit at each stage. It
should contain as much information regarding costs as may be necessary
for the purposes of cost analysis and cost control. In actual practice, the
corresponding figures of the preceding period are also shown in the) Cost
Sheet for purposes of comparison. This facilitates cost control.
You learnt about the preparation of Cost Sheet in Unit 3 Block 1. We shall
now study about it in more detail. The proforma of Cost Sheet is given here
again in Figure 12.1.
Figure 12.1 : Proforma of Cost Sheet
COST SHEET OF…………………….
for the month ending ………………
Output:…………. Units
Total: Per unit
Rs. Rs.
Raw Materials Consumed
Opening Stock of Raw Materials
Add : Purchases of Raw
Materials
Less: Closing Stocks of Finished
Goods
……………
……………
__________
Direct Labour
Other Direct Expenses
……………
……………
__________
……………
……………
__________
……………
……………
__________
PRIME COST …………… ……………
Factory Overheads
………….
………….
………….
………….
………….
………….
WORKS COST …………. ………….
Office & Administrative
Overheads ………….
………….
………….
………….
………….
………….
________
……………
……………
……………
……………
……………
________
……………
_________
……………
COST OF PRODUCTION
(…………units)
…………… ……………
Add : Opening Stock of Finished
Goods
(…………units)
Less : Closing Stock of Finished
Goods
(…………units)
COST OF GOODS SOLD
(…………units)
Selling & Distribution Overheads
……………
…………..
……………
……………
……………
……………
__________
……………
_________
……………
__________
……………
__________
……………
__________
……………
__________
……………
_________
COST OF SALES
(…………units)
…………… ……………
PROFIT (LOSS)
SALES/SELLING PRICE
……………
__________
……………
___________
……………
__________
……………
__________
Look at Illustration 1 and see how Cost Sheet is prepared from the given
data.
Illustration 1: In a factory 20,000 units of Product X were manufactured
in the month of September, 2018. From the following figures obtained from
the costing records, prepare a Cost Sheet showing the total cost and cost per
unit:
Rs.
Direct Material Consumed
Direct Wages
Other Direct Expenses
Factory Overheads
Office & Administrative Overheads
Selling & Distribution Overheads
2,00,000
1,60,000
40,000
80,000
60,000
60,000
Solution:
Cost Sheet of Product ‘X’ for the Month of September, 2018
Output : 20,000 units
Total Cost
Rs.
Cost Per unit
Rs.
Cost of Direct Materials 2,00,000 10.00
Cost of Direct Labour 1,60,000 8.00
Cost of Other Direct Expenses 40,000 2.00
PRIME COST 4,00,000 20.00
Add Factory Overheads 80,000 4.00
FACTORY/WORKS COST 4,80,000 24.00
Add : Office & Administrative
Overheads
60,000 3.00
COST OF PRODUCTION 5,40,000 27.00
Add: Selling & Distribution
Overheads
60,000 3.00
TOTAL COST/COST OF SALES 6,00,000 30.00
Note: Cost per unit for each component of total cost has been arrived at by
dividing the amount by the total output.
12.3.1 Ascertainment of Cost of Direct Materials
While considering the cost of direct materials, only the cost of direct materials
actually used or consumed should be taken into account. Normally, all the
raw materials purchased in a particular period are not consumed during the
same period. Certain amount of raw materials is always kept in stock so that
production may not be interrupted for want of materials. In most cases, the
cost of direct materials actually used in production is not given. It should be
determined in the following manner:
Cost of Direct Materials Used in Production Rs.
Cost of Opening Stock of Raw Materials ……..
Add : Cost of Raw Materials purchased ……..
Add : Carriage/Freight on purchases, if any …….. ……..
Cost of Raw Materials available for use ……..
Less: Cost of Closing Stock of Raw Materials …….. ……..
Look at Illustration 2 and see how cost of direct materials consumed is
worked out.
Illustration 2 : From the particulars given below, determine the cost of
direct materials consumed.
Opening Stock of Raw Materials
Purchase of Raw Materials
Carriage Inwards
Closing Stock of Raw Materials
Carriage Outwards
Production Wages
Rs.
40,000
2,40,000
20,000
50,000
20,000
1,80,000
Solution:
Cost of Direct Materials Used in
Production
Cost of Opening Stock of Raw
Materials
Add: Cost of Raw Materials purchased
Add: Carriage Inward
Cost of Raw Materials available for use
Less: Cost of Closing Stock of Raw
Materials
2,40,000
20,000
Rs.
40,000
2,60,000
3,00,000
50,000
Rs.
2,50,000
V alue of stock of raw materials may be determined in any one of the methods
discussed in Unit 5 on materials. However, in the absence of any indication
in the given problem, it would be better to value the stock of raw materials
on FIFO basis and to give a note to that effect.
12.3.2 Ascertainment of Cost of Direct Labour
While considering the cost of direct labour, only the cost of direct labour actually
used in production should be taken into account. If there are outstanding or
prepaid direct wages, the same should be adjusted in the following manner:
Cost of Direct Labour Used in Production Rs.
Direct Wages paid ………
Add: Outstanding Direct Wages, if any ………
Less: Pre-paid Direct Wages, if any
________
……... ……..
……..
________
Read More
|
106 videos|173 docs|18 tests
|
FAQs on Unit Costing - Cost Accounting - B Com
| 1. What is unit costing in B Com? |  |
Ans. Unit costing in B Com is a method used to determine the cost per unit of a product or service by dividing the total cost by the number of units produced or sold.
| 2. How is unit cost calculated in B Com? | |
Ans. Unit cost in B Com is calculated by dividing the total cost of production or service by the number of units produced or sold. This gives the cost per unit.
| 3. Why is unit costing important in B Com? | |
Ans. Unit costing is important in B Com as it helps businesses determine the profitability of each unit produced or sold. It also assists in pricing decisions and cost control measures.
| 4. What are the advantages of using unit costing in B Com? | |
Ans. Some advantages of using unit costing in B Com include better decision-making, accurate pricing, cost control, and improved efficiency in production.
| 5. How can businesses use unit costing to improve their operations in B Com? | |
Ans. Businesses can use unit costing in B Com to identify areas where costs can be reduced, evaluate the performance of different products or services, and make informed decisions about pricing strategies.
Related Exams
About this Document
|
4.60/5 Rating |
|
Nov 15, 2024 Last updated |
Document Description: Unit Costing for B Com 2024 is part of Cost Accounting preparation.
The notes and questions for Unit Costing have been prepared according to the B Com exam syllabus. Information about Unit Costing covers topics
like and Unit Costing Example, for B Com 2024 Exam. Find important definitions, questions, notes, meanings, examples, exercises and tests below for Unit Costing.
Introduction of Unit Costing in English is available as part of our Cost Accounting
for B Com & Unit Costing in Hindi for Cost Accounting course.
Download more important topics related with notes, lectures and mock test series for B Com
Exam by signing up for free. B Com: Unit Costing | Cost Accounting - B Com
Description
Full syllabus notes, lecture & questions for Unit Costing | Cost Accounting - B Com - B Com | Plus excerises question with solution to help you revise complete syllabus for Cost Accounting | Best notes, free PDF download
Information about Unit Costing
In this doc you can find the meaning of Unit Costing defined & explained in the simplest way possible. Besides explaining types of
Unit Costing theory, EduRev gives you an ample number of questions to practice Unit Costing tests, examples and also practice B Com
tests
|
Explore Courses for B Com exam
|
|
Signup for Free!
Signup to see your scores go up within 7 days! Learn & Practice with 1000+ FREE Notes, Videos & Tests.
Related Searches
Summary
,MCQs
,Previous Year Questions with Solutions
,Sample Paper
,Free
,ppt
,Extra Questions
,study material
,mock tests for examination
,Objective type Questions
,practice quizzes
,Unit Costing | Cost Accounting - B Com
,Unit Costing | Cost Accounting - B Com
,Viva Questions
,past year papers
,Important questions
,Exam
,shortcuts and tricks
,Semester Notes
,Unit Costing | Cost Accounting - B Com
,video lectures
;
Additional Information about Unit Costing for B Com Preparation
Unit Costing Free PDF Download
The Unit Costing is an invaluable resource that delves deep into the core of the B Com exam.
These study notes are curated by experts and cover all the essential topics and concepts, making your preparation more efficient and effective.
With the help of these notes, you can grasp complex subjects quickly, revise important points easily,
and reinforce your understanding of key concepts. The study notes are presented in a concise and easy-to-understand manner,
allowing you to optimize your learning process. Whether you're looking for best-recommended books, sample papers, study material,
or toppers' notes, this PDF has got you covered. Download the Unit Costing now and kickstart your journey towards success in the B Com exam.
Importance of Unit Costing
The importance of Unit Costing cannot be overstated, especially for B Com aspirants.
This document holds the key to success in the B Com exam.
It offers a detailed understanding of the concept, providing invaluable insights into the topic.
By knowing the concepts well in advance, students can plan their preparation effectively.
Utilize this indispensable guide for a well-rounded preparation and achieve your desired results.
Unit Costing Notes
Unit Costing Notes offer in-depth insights into the specific topic to help you master it with ease.
This comprehensive document covers all aspects related to Unit Costing.
It includes detailed information about the exam syllabus, recommended books, and study materials for a well-rounded preparation.
Practice papers and question papers enable you to assess your progress effectively.
Additionally, the paper analysis provides valuable tips for tackling the exam strategically.
Access to Toppers' notes gives you an edge in understanding complex concepts.
Whether you're a beginner or aiming for advanced proficiency, Unit Costing Notes on EduRev are your ultimate resource for success.
Unit Costing B Com Questions
The "Unit Costing B Com Questions" guide is a valuable resource for all aspiring students preparing for the
B Com exam. It focuses on providing a wide range of practice questions to help students gauge
their understanding of the exam topics. These questions cover the entire syllabus, ensuring comprehensive preparation.
The guide includes previous years' question papers for students to familiarize themselves with the exam's format and difficulty level.
Additionally, it offers subject-specific question banks, allowing students to focus on weak areas and improve their performance.
Study Unit Costing on the App
Students of B Com can study Unit Costing alongwith tests & analysis from the EduRev app,
which will help them while preparing for their exam. Apart from the Unit Costing,
students can also utilize the EduRev App for other study materials such as previous year question papers, syllabus, important questions, etc.
The EduRev App will make your learning easier as you can access it from anywhere you want.
The content of Unit Costing is prepared as per the latest B Com syllabus.
|
© EduRev
|
Education Revolution
|
Follow Us
|
Signup to see your scores
go up within 7 days!
Access 1000+ FREE Docs, Videos and Tests
Takes less than 10 seconds to signup