MUSINGS

A cost sheet is prepared to know the outcome and breakup of costs for a particular accounting period. Columnar form is most popular. Although cost sheets are prepared as per the requirements of the management, the information to be incorporated in a cost sheet should comprise of cost per unit and the total cost for the current period along with the cost per unit and the total cost of preceding period. Data of financial statement is used for preparation of cost sheet. Therefore, reconciliation of cost sheet and financial statement should be done on a regular interval. Format COST SHEET OR STATEMENT OF COST Total Units……… Opening Stock of Raw material ... ... ... ... ... ... ... ... Add: Purchases ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... Less: Closing Stock ... ... ... ... ... ... ... ... Cost of material Consumed → ... ... ... ... ... ... ... ... Add: Direct Labor/Wages ... ... ... ... ... ... ... ... Prime Cost → ... ... ... ... ... ... ... ...

Both cost accounting and financial accounting help the management formulate and control organization policies. Financial management gives an overall picture of profit or loss and costing provides detailed product-wise analysis. No doubt, the purpose of both is same; but still there is a lot of difference in financial accounting and cost accounting. For example, if a company is dealing in 10 types of products, financial accounting provides information of all the products in totality under different categories of expense heads such as cost of material, cost of labor, freight charges, direct expenses, and indirect expenses. In contrast, cost accounting gives details of each overhead product-wise, such as much material, labor, direct and indirect expenses are consumed in each unit. With the help of costing, we get product-wise cost, selling price, and profitability. The following table broadly covers the most important differences between financial accounting and cost accounting. P

The advantages of cost accounting are: Disclosure of profitable and unprofitable activities Since cost accounting minutely calculates the cost, selling price and profitability of product, segregation of profitable or unprofitable items or activities becomes easy. Guidance for future production policies On the basis of data provided by costing department about the cost of various processes and activities as well as profit on it, it helps to plan the future. Periodical determination of profit and losses Cost accounting helps us to determine the periodical profit and loss of a product. To find out exact cause of decrease or increase in profit With the help of cost accounting, any organization can determine the exact cause of decrease or increase in profit that may be due to higher cost of product, lower selling price or may be due to unproductive activity or unused capacity. Control over material and supplies Cost accounting teaches us to account for the cost of mate

Concepts of Cost Accounting Following are the main concepts of cost accounting: Cost There is a cost involved to purchase or produce anything. Costs may be different for the same product, depending upon the stages of completion. The cost changes according to the stage a product is in, for example, raw material, work in progress, finished goods, etc. The cost of a product cannot be perfect and it may vary for the same product depending upon different constraints and situations of production and market. Expenses Some costs are actual, such as raw material cost, freight cost, labor cost, etc. Some expenses are attributable to cost. To earn revenue, some expenses are incurred like rent, salary, insurance, selling & distribution cost, etc. Some expenses are variable, some are semi-variable, and some of fixed nature. Loss Expenses are incurred to obtain something and losses are incurred without any compensation. They add to the cost of product or services without any valu

Enterprise Resource Planning: What Is It? Enterprise Resource Planning refers to a software that brings together all facets of an operation. These tools integrate functions like marketing, HR, logistics, and customer service, all with the intention to make processes more efficient. An ERP software automates the core processes by collecting orders, delivering reports on these orders and gathering and storing information to make each of your departments effective. In short, an Enterprise Resource Planning software has the ability to cut out unnecessary tasks and jobs, essentially minimizing the amount of work each person in your organization has to complete. This saves you money in the long run. The Components of an ERP System Think about all of the current software for your company. You might have a  customer relationship management  tool, a website, accounting software, supply chain management modules, HR systems and email marketing tools. Wouldn't it be nice if one sy

A virtual private network (VPN) is programming that creates a safe, encrypted connection over a less secure network, such as the public internet. A VPN uses  tunneling  protocols to encrypt data at the sending end and decrypt it at the receiving end. To provide additional security, the originating and receiving network addresses are also encrypted. VPNs are used to provide remote corporate employees,  gig economy  freelance workers and business travelers with access to software applications hosted on proprietary networks. To gain access to a restricted resource through a VPN, the user must be authorized to use the VPN app and provide one or more authentication factors, such as a password, security token or biometric data. VPN apps are often used by individuals who want to protect data transmissions on their mobile devices or visit web sites that are geographically restricted. Secure access to an isolated network or website through a mobile VPN should not be confused with pr

Online marketing (e-marketing) – is an interactive process, when using information technologies long-term relations between the company and customers are developed. In the broad sense, marketing comprises strategic and tactic planning processes which are to meet customers’ needs and bring maximum profit. E- marketing can be of two types: As a marketing strategy component of a whole organisation. As a standalone system, which contains all traditional marketing components, but they are transferred into e-space. In e-marketing customers are not grouped into segments by the traditional demographic method but by their behaviour. To provide more and better quality information sales advertising is used. The number of distribution channels grows and the number of intermediaries increases as manufactures discover new ways of delivering the product to the buyer directly. Companies have to introduce a different type of marketing to be able to adjust to new circumstances. E-marketing is c