MUSINGS

Types of Cost Some types of costs in cost accounting are direct, indirect, fixed, variable and operating costs. A DIRECT COST is related to producing a good or service. A direct cost is the material, labor, expense or distribution cost associated with producing a product. It can be accurately and easily traced to a product, department or project. For example, suppose a worker spends eight hours building a car for a car manufacturing company. The direct costs associated with the car are the wages paid to the worker and the parts used to build the car. On the other hand, an INDIRECT COST is an expense unrelated to producing a good or service. An indirect cost cannot be easily traced to a product, department, activity or project. For example, an IT company rents office space in a building and produces microchips. The wages paid to the workers and the material used to produce the microchips are direct costs. However, the electricity used to power the entire building...

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...

Different Important Terms for  you Cost Centre A  cost centre  is a department within a company that does not produce direct profit and adds to the cost of running a company. However, all cost centres perform an important job. It improves the satisfaction of customers and indirectly increases sales. The manager and employees of cost centre are not accountable for its profit and investment decision but they are responsible for its cost. They are liable for keeping their cost in line or below budget because cost centre does not produce directly from its activities.The performance of the managers is assessed by comparing the actual expenses incurred with the budgeted expenses for the cost centre. Basically cost is the control data in the cost centre. There are two main types of cost centres: Production cost centres: This is where the products are manufactured or processed. Example of this is an assembly area. Service cost centres: This is where a servi...

Meaning of Personnel Management ↓ Personnel refer to the employees working in an organisation. They represent the manpower which is an important asset of a business unit. Employees are the real supporters of a business unit and they contribute substantially for the stability and prosperity of a business unit. Employees have various problems relating to wage payment, promotions, transfers, working conditions, welfare facilities, training and so on. All such problems are treated as personnel problems. These problems come within the scope of personnel management which is one important area of total business management. Naturally, a separate department called 'Personnel Department' is created in every organisation. It looks after the personnel problems. The manager in charge of this department is called personnel manager. He has to perform various functions which are responsible in nature and also delicate. He needs tact and imagination while dealing with personnel problems. H...

Every business unit needs human resource (manpower) for the conduct of different business activities. In fact, no organisation can exist or operate efficiently without the support of human resource. Such human resource includes top level managers, executives, supervisors and other subordinate / lower level staff / employees. A business organisation has to estimate its future manpower needs and adjust its manpower planning and development programmes accordingly. This is called ' staffing ' function of management. Human resource management is also described as personnel management or manpower management. Meaning of Human Resource ↓ In an industrial unit, large number of persons are employed in order to conduct various operations and activities. This is treated as human resource or manpower employed. A business unit needs material resources as well as human resource for the conduct of various activities. Of all the "M"s in management (such as Materials, Machines, ...

A method of accounting in which all costs incurred in carrying out an activity or accomplishing a purpose are collected, classified, and recorded. This data is then summarized and analyzed to arrive at a selling price, or to determine where savings are possible. In contrast to financial accounting (which considers money as the measure of economic performance) cost accounting considers money as the economic factor of production. COST Cost is commonly defined as ‘sacrificed resource’ for a particular thing. If we buy a watch for Rs 3000, a number of Rs are considered to be the cost of that watch. Here, Rs 3000 are sacrificed to obtain a watch. It is the simplest example but cost can be of anything which is measurable in terms of money. For example, the cost of preparing one pizza which in itself include various other costs like cost of flour, other ingredients, labor, electricity and other overheads. Just the same way, cost of production of any product or service can be determined. ...

theory x ('authoritarian management' style) The average person dislikes work and will avoid it he/she can. Therefore most people must be forced with the threat of punishment to work towards organisational objectives. The average person prefers to be directed; to avoid responsibility; is relatively unambitious, and wants security above all else. theory y ('participative management' style) Effort in work is as natural as work and play. People will apply self-control and self-direction in the pursuit of organisational objectives, without external control or the threat of punishment. Commitment to objectives is a function of rewards associated with their achievement. People usually accept and often seek responsibility. The capacity to use a high degree of imagination, ingenuity and creativity in solving organisational problems is widely, not narrowly, distributed in the population. In industry the intellectual potential of the average person is only partly u...