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COST UNIT ICMA defines cost unit as A unit of quantity of product, service or time related to which costs may

y be ascertained or expressed. For e.g. Brick works per 1,000 bricks Steel co.s per tonne of steel Transport co.s per pass km

COST CENTRE ACCORDING TO ICMA, Cost centre means A location, person or item of equipment for which costs may be ascertained and used for the purpose of cost control.

COST ESTIMATION Cost estimation is the process of pre determining the costs of a certain product, job or order.

COST ASCERTAINMENT
Cost ascertainment is the process of determining costs on the basis of actual data.

COST ALLOCATION
Cost allocation refers to the allotment of whole items of costs to cost centres or cost units.Eg: salary of foreman, power, etc.

COST APPORTIONMENT
Cost apportionment refers to the allotment of proportions of items of cost to cost centres or cost units. Eg : Salary of GM is apportioned to various departments on the basis of time devoted by him.

COST CONTROL AND COST REDUCTION


Cost control aims at maintaining the costs in accordance with established standards while cost reduction is concerned with reducing costs. The objective of cost control is to achieve the cost target while the that of cost reduction is to improve the targets themselves.

COST CONTROL AND COST REDUCTION CONTD.


Cost control ends when targets are achieved while cost reduction has no visible end. Cost control is a preventive function while cost reduction is a corrective function.

METHODS OF COSTING
JOB COSTING CONTRACT COSTING BATCH COSTING PROCESS COSTING UNIT COSTING OPERATING COSTING MULTIPLE COSTING

JOB COSTING
ICMA defines job costing as that form of specific order costing which applies where work is undertaken to customers special requirements and production is not repetitive. Eg: vehicle service, grill doors, etc.

CONTRACT COSTING
ICMA defines contract costing as that form of specific order costing which applies where work is undertaken to customers special requirements and each order is for long duration. Eg: house construction, ship building, etc. A contract is a big job and job is a small contract.

BATCH COSTING
ICMA defines batch costing as that form of specific order costing which applies where similar articles are manufactured in batches either for sale or for use with in the undertaking.Eg: biscuit manufacturing, pharma, ready made garments, etc.

PROCESS COSTING
It is a method of costing where cost is ascertained at the stage of every process and also after completing the finished production.Eg: paints, textiles, etc.

UNIT COSTING
It is a method of costing where the cost per unit of output or production is ascertained and the amount of each element constituting such cost is determined.Eg: brick making, quarries, etc.

OPERATING COSTING
ICMA defines operating costing as that form of costing which applies where standardised services are provided either by an undertaking or by a service cost centre.Eg: transport undertakings, electricity supply, etc.

MULTIPLE COSTING
It is a method of costing used in those industries which assemble various components or parts. Such industries make use of more than one method of costing.Eg: automobiles, TV manufacturing, etc.

TYPES OF COSTING
UNIFORM COSTING MARGINAL COSTING STANDARD COSTING DIRECT COSTING ABSORBTION COSTING