Cost Accounting IInd year

Cost Unit
Cost unit is that unit of measurement which is helpful to classify the cost and measure the cost of products and services. Before measuring the cost, we should determine the cost unit. It should be different according the nature of products and nature of business. You normally see, the vendor of medicine will sell you the medicine in the form of batch of 12 or 20 tablets. These batch is also cost unit. Following are the examples of cost unit.

 1. We measure coal in tonne. So, tonne is the cost unit. One metric ton will be equal to 1000 kgs but our cost unit will be tonne or ton. If you want to buy coal, you buy coal at prices range between Rs 770 and Rs 1,700 a tonne.

2. We know that wall bricks are measured in one thousand. So, cost unit will  thousand bricks. These days, one thousand bricks cost is Rs. 5000.

3. Cost unit of transport service is per ton per km. For example, you have 20 ton product. Transport service provider will take the Rs. 500 per ton per kilometer. It means, you have to pay Rs. 10000 for transferring goods upto one kilometer. If you have to transfer goods for 10 kilometers. You will pay Rs. 100,000.

Cost Unit Vs Unit Cost 

Cost unit is the standard unit for buying minimum quantity of any inventory. Unit cost is the minimum price for  buy any standard unit of any inventory.

Comments

Post a Comment

Popular posts from this blog

Work certified and uncertified

Meaning of Work Certified  When contractor takes the contract to complete any construction work, it may complete in 4 or 5 years. but contractor has to pay different expenses for material, labor and others. So, it is very necessary to pay him some money of contract. This money is given on the basis of work done. So, any part of construction which is completed by contractor will be work certified if it is certified by an authority. Authority may be independent engineer or architect who can estimated the work. He will issue the certificate of work done after certifying the work of construction. On this work certified, contractor has right to get money of contract. Meaning of Work Uncertified Work uncertified means work done but not certified by authority. So, contractee will cut some money on the basis of work uncertified and will keep in his pocket. This will be retention money. Accounting Treatment of Work Certified and Work Uncertified  (I) Work  certified and work unce
Read more

Sale of Goods Act- Conditions and Warranties

Image
The Sale of Goods Act, identifies the terms, ‘Conditions’ and ‘Warranties’ as being of a prime significance in a contract of sale. Both the terms imply a promise that is made by the seller. However, the difference between Conditions and Warranties arises due to the nature of the promise that is made in each case. In the case of ‘Condition’ the impact is on the very essence of the contract; whereas, in the case of ‘Warranty’, the promise is in the nature of a collateral to the main purpose of the contract. It is thus evident that if there is a breach of either, a condition or a warranty, the effects will be different. Illustration 1:   Sita bought a wet grinder from an electric shop. The purpose for which the grinder was to be used was known to the seller. The grinder was unfit for the purpose. In this case there is a breach of an express condition by the electric shop and Sita is entitled to return the grinder and be refunded the money paid. Illustration 2:   Varuna bought a
Read more

E Commerce Security environment

THE ECOMMERCE SECURITY ENVIRONMENT What is eCommerce Security? eCommerce security refers to the principles which guide safe electronic transactions, allowing the buying and selling of goods and services through the Internet, but with protocols in place to provide safety for those involved. Successful business online depends on the customers’ trust that a company has eCommerce security basics in place. Privacy One of the most obvious eCommerce security basics is privacy, which in this situation means not sharing information with unauthorized parties. When you shop online, your personal details or account information should not be accessible to anyone except the seller you have chosen to share it with. Any disclosure of that information by the merchant would be a breach of confidentiality. The business is responsible to provide at least the minimum in encryption, virus protection, and a firewall so that bank details and credit card information remain private. Integrity A s
Read more