7 Methods of accounting for CS Executive – Cost & Management

Methods of accounting for CS Executive

So, Let us have a look:- According to different industries, there are different methods of costing also:

 Unit Costing:

1. This is also called as Single Costing/Output Costing.
2. As the name follows, costing method is prepared by the industries engaged in the production of a single product.
3. For example Shoes, Pens, Markers, Coal, Bricks, etc.
4. Cost sheet (a detailed statement of Cost of Sales) of a product is drafted.
5. The Target is to calculate Cost per unit, i.e Cost/No. of units produced

Operating Costing:

1. Operating costing method is used by the Service Providing Industries.
2. For example- Transportation, Hotels, Hospitals, Educational Institutes, etc.
3. Here the Cost unit of the industry is identified & calculated.
4. The Cost of operating a business is divided in Standing & Running Charges.

Contact Costing:

1. Done for Construction businesses by the Contractors.
2. For example – Bridge Construction.

Job Costing:

1. Used by the industries engaged in Order Based work (not in regular production)
2. Industries, which do customized work.
3. For example Advertising Agencies, Interior Designing, CA, CS, CMA, Doctors.
4. Cost Centre & Cost unit is the Jobs.

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Batch Costing:

1. Industries where work is done in Batches/Lots.
2. For example: – 10 strips of a medicine produced simultaneously when a machine runs.
3. Cost Center & the Cost unit is the Batch.

Process Costing:

1. Large scale Industries where production procedure is divided into stages/processes.
2. A finished product gets ready in stages.
3. Cost per unit is calculated at each process.
4. For example, Food & Beverages, Oil Refineries, Textiles.

Multiple Costing:  The Industries, which could use multiple methods of costing.

So, these are the different methods of Costing online for your Basics. This is just a glimpse of the topic. They are all separate Chapters under Cost & Management Accounting.

We, Takshila Learning, your’s online Education partner. We are offering CS Executive online classes. Our Target is to help out in the journey of your CS Preparation. Today we have brought an important article related to “Paper 2,  Cost & Management Accounting online ” of CS Executive.

While preparing for CS Preparation, we must have studied in details about Cost and Management Accounting. So, in continuation of our previous blog, in this, we are discussing the different “ Methods of Accounting”.

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