0
Traditional costing and activity-based costing (ABC) is to comment on the uniqueness of the products received. In traditional based costing, costs can be allocated to all products, because they are not unique. Traditional based costing works well for homogenous products that go through the same manufacturing process. ABC works well for products that are not homogenous and that can be run into batches. It helps apply costs to products that perhaps have had more "activities" applied to them; so therefore, they should be allocated more costs. For an example, assume that you and your friends go to a restaurant as a group. At the end of the meal, you must decide how the bill for the group should be shared. One alternative is to figure out the cost of what each individual consumed and divide up the bill accordingly. Another alternative is to split the bill equally among the individuals. In this example of of the restaurant, if the consumers split the bill up equally, they would be applying the same costs to each of their meals. They would be in a sense saying that each meal provided the same value. However, if they split the bill up according to the consumption of each individual, so in a sense allocating the costs out specifically, they would be acknowledging that each meal did provide different value, so the person eating a hamburger should pay less then a person eating a lobster.
Similarities Between Cost Accounting & Financial Accounting
Many companies use both cost and financial accounting for business purposes.
Accounting is generally divided into two main types: financial accounting and cost accounting, a part of managerial accounting. Financial accounting is designed for external purposes and consists of recording financial transactions according to generally accepted accounting principles, or GAAP. Cost accounting is used internally and is more focused on improving the company's performance. While these two types of accounting are different in many aspects, they share several similarities. Cost and financial accounting have similar terminology and both use information provided through financial reports.
· Cost and financial accounting both use the same basic accounting terminology. For example, both types of accounting base information on debits and credits. Both also refer to a general ledger; which is a book that tracks all financial transactions in various accounts. The same accounts and types of accounts are also used cost and financial accounting. Both types of accounting separate accounts into categories consisting of assets, liabilities, equities, revenues and expenses. Within each category, one or more accounts exist that are used to track specific financial transactions.
Reports
· Financial accounting is used to produce reports that include financial statements, including the balance sheet, income statement and statement of cash flows. This information is given to external parties, such as stockholders, investors and lending institutions. With cost accounting, the documents produced through financial accounting are used by people within the company to make internal decisions. The use of financial statements is vital to both types of accounting. The difference lies in the groups of people that use the information.
Historical Data
· Cost Accountants and financial accountants both are interested in historical information about a company. This information is provided through financial statements. A primary reason that this information is important is to make future decisions for the company. With both types of accounting, future plans are created based on historical information. This includes forecasting, creating budgets and planning future projects.
Company Performance
· Both financial accounting and cost accounting focus on ways to improve company performance. Financial accounting, however, concentrates on an entire company, while cost accounting generally divides performance by division, location or region. Financial accounting focuses on company performance by closely monitoring accounts payables and accounts receivables. Cost accounting also monitors performance issues by viewing these accounts and other data such as the cost of goods sold.
From both methods we can ascertain costs which business needs.
The both systems are dealing with holding within a contract cost by book keeping method.
Both Methods are makes use of appraised expenditure data as the base for necessary order price quotations.
Add your answer:
Earn +20 pts
What is the similarities between job and vocation?
what is the similarities between vocation and job?
What are the similarities between a student and a teacher?
Work is a job for grown - ups.School is a job for children.
What was the difference and similarities between rich and poor Victorians?
rich poor have food don't have food can play have a job
Similarities between salary and a wage?
They are both payments for people that do their job for hours giving good customer service.
Why do Australians hate Indians?
New Zealand and Australia have many similarities in history and non-indigenous culture and also have a fairly close relationship because of these similarities and their isolation from other similar cultures. The relationship between the countries is generally one of friendly rivalry rather than hatred.
What is difference between job costing contract costing?
job costing refers to very small work while contract costing refers to large work like building a bridge.
What is the similarities between job and vocation?
what is the similarities between vocation and job?
What is contract costing?
It is when a company set out how much they will put aside for contractors when working out expenses for a job.
Is a hospital a job costing or process costing?
a job costing
What is the and purpose of Job Costing Process Costing?
outline the characteristics and purpose of: Job costing and process costing
Differences between costing method and costing techniques?
Methods of Costing The cost of products or services is determined using several methods. The use of a given method is dictated by such factors as: the nature of cost units, the production process, the mode of cost accumulation, the duration of work etc. The following are the well established methods of costing a. Job / Batch costing b. Contract costing c. Process costing d. Service costing Techniques of Costing Irrespective of the type of costing method being applied there are various approaches that could be adopted. These are:  Full Absorption costing  Marginal costing  standard costing using  absorption costing  marginal costing
What is the difference between job costing and operating costing?
Job costing is when for example a tradesman comes to give you a quote for how much he is willing to do the job/repair that you want to be done, whereas Operating costs are what a buisness has to spend in order to keep functioning, overheads ect.
What does the process of job costing mean in terms of business?
Job costing or as some may know it, Job order costing is fundamental to managerial accounting. It differs from Process costing in that flow of cost is tracked by job but not a process. The main difference is that Job costing is in the nature of jobs/work and process costing in a process.
What is the job costing and give you the example?
Labour costing. Material costing
What is the characteristics and purpose of Job Costing and Process costing?
what is the purpose of process costing?
What type of company uses Job costing?
Manufacturing companies use job costing.
Outline the characteristics and purpose of job costing and process costing?
Job costing characteristics and purpose of it: its purpose is to is to calculate the cost of the materials found in the wastestream based on purchase price of materials. Please assist me with further characteristics and purpose of job costing and process costing to this extent.
