Answer to Question #180496 in Civil and Environmental Engineering for Sadia

Question #180496

A civil engineering firm with the sugar and related product (like ice cream )Books of accounts show different amounts of Material „FOH Work in process at different dates of time. Once the material with amount 2000 dollar is credit. How you interpret this with other accounts. What is the stage of company in job order costing

Expert's answer

An orderly arrangement of systems for documenting and revealing estimations of the value of assembling products and conducting administrations in the aggregate and in detail," according to the definition of cost accounting. It includes methods for detecting, characterizing, dispensing, totaling, and reporting such expenses, as well as comparing them to regular expenses. Its ultimate goal is to allow the administration to advance strategic strategies and cycles based on cost effectiveness and ability. It is also considered to be a subset of administrative bookkeeping. Cost bookkeeping provides the itemized cost data that management requires to manage existing projects and prepare for the future.

For instance, a company that only made railway coaches had only one product. The company needed to spend $60 on raw materials and parts for each coach, as well as pay $6 laborers $40 each. As a result, each coach's gross variable cost was $300.  If the fixed costs were, say, $1000 per month for rent, insurance and owner's salary, the company could therefore sell 5 coaches per month for a total of $3000 (priced at $600 each), or 10 coaches for a total of $4500 (priced at $450 each), and make a profit of $500 in both cases.

Managerial accountants use details about the expense and sales income of the company's products and services. Cost accounting is a broad subset of managerial accounting that focuses on capturing a company's overall costs of production by analyzing both variable and fixed costs in each phase of production. It enables companies to recognize and eliminate wasteful spending while increasing profits.

Any cost that cannot be capitalized into prepaid expenditures, inventory, or fixed assets is referred to as a period cost. The passing of time is more closely correlated with a cycle expense than with a transaction case. Since a period cost is almost always paid to an expense all at once, it's better to call it a period expense. A period cost is applied to an expenditure for the time period in which it was incurred. This form of expense is not included in the income statement's cost of goods sold. Instead, it's usually included in the income statement's sale and operating expenses portion. In cost accounting, marketing and administrative costs are referred to as period costs.

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