Appendix One - Formulae Study Note : 1 Financial, Cost and Management Accounts Techniques Methods 1. Process Costing 2. Job / Contract Costing 3. Operation Costing Variation of above methods Batch Costing Joint Costing Multiple Costing
Character Continuous Production One Job differ from other Job. (Tailor made job) Service Provider
Suitable for Sugar, Cement, Chemical, Fertilizer Construction of Road, Bridge, Hospital
A lot produce at once To some extent Joint then separate Various method applied
Pharma, Jewelry Crude Oil
Transportation, Hospital, Hotel, Telecom, Bank Information technology
Car, Radio, TV and Electronics Items
Techniques :
1. Marginal Costing 2. Standard Costing 3. Budgetary Control 4. Uniform Costing 5. Inter firm Comparison 6. Target Costing 7. Activity Base Budget 8. Activity Base Management
Techniques can be used in any industries at any time. These techniques more than one can be applied at a time For Decision Making Decision for Price & Volume For Control & Reduction Cost Variance Analysis For Control & Reduction Cost Control of element wise cost For Control & Reduction Cost Compare with other units in the same industry For Control & Reduction Cost Compare with other firm For Control & Reduction Cost Phasewise controlling For Control & Reduction Cost Control through value added activity For Control & Reduction Cost Control through value added use of resources
Study Note : 2 Material Costing (1) EOQ = √2AO/C
=
A = Annual Demand O = Ordering Cost C = Carrying Cost p.a.
Carrying Cost is the cost incurred for storage of Material, Space cost, Insurance and Interest of Working Capital to hold inventory. 442