cost accounting

/Tag: cost accounting

September 2018

Uses and Limitations of Marginal Costing

By |2018-09-18T10:04:19+00:00September 18th, 2018|Cambridge AS A Level Accounting, Notes, ZIMSEC A Level Accounting|

Cambrige AS and A Level Accounting Notes (9706)/ ZIMSEC  Advanced Accounting Level Notes: Uses and Limitations of Marginal Costing

  • According to research by CIMA the leading Management Institute
  • Traditional costing methods such as Absorption costing are still in widely used by manufacturing businesses throughout the world
  • There is are reasons for this:

Uses/Advantages of Absorption costing

  • Marginal costing is easy […]
Comments Off on Uses and Limitations of Marginal Costing

The differences between marginal and absorption costing

By |2018-09-17T08:34:09+00:00September 17th, 2018|Cambridge AS A Level Accounting, Notes, ZIMSEC A Level Accounting|

Cambrige AS and A Level Accounting Notes (9706)/ ZIMSEC  Advanced Accounting Level Notes: Marginal Costing vs Absorption Costing

  • Having introduced you to both absorption costing and marginal costing
  • It is time to look at some of the differences between the two
  • In discussing marginal costing we have already pointed out the differences between it and marginal costing
  • […]

Comments Off on The differences between marginal and absorption costing

Reconciliation of absorption and marginal profits

By |2018-09-04T17:30:22+00:00September 4th, 2018|Cambridge AS A Level Accounting, Notes, ZIMSEC A Level Accounting|

Cambrige AS and A Level Accounting Notes (9706)/ ZIMSEC  Advanced Accounting Level Notes: Reconciliation of marginal costing and absorption costing profits

  • Because absorption costing includes the cost of fixed overheads in:
    1. Opening and closing inventory and
    2. Cost of sales
  • There will be inevitable differences in profit figures calculated using the two methods
  • These differences will arise whenever there […]
Comments Off on Reconciliation of absorption and marginal profits

August 2018

Marginal Costing: Statement of Profit or Loss

By |2018-09-04T07:22:46+00:00August 23rd, 2018|Cambridge AS A Level Accounting, Notes, ZIMSEC A Level Accounting|

Cambrige AS and A Level Accounting Notes (9706)/ ZIMSEC  Advanced Accounting Level Notes: Marginal Costing: Statement of Profit or Loss

  • As has been outlined here there are differences between marginal costing and absorption costing
  • One such stark difference is in the format of statements of profit
  • Below is a proforma Statement of Profit using marginal costing

Marginal Costing Statement […]

Comments Off on Marginal Costing: Statement of Profit or Loss

Marginal Costing: Introduction

By |2018-08-23T08:36:39+00:00August 23rd, 2018|Cambridge AS A Level Accounting, Notes, ZIMSEC A Level Accounting|

Cambrige AS and A Level Accounting Notes (9706)/ ZIMSEC  Advanced Accounting Level Notes: Marginal Costing: Introduction

  • We have already looked at absorption costing here
  • Now it is time to examine marginal costing which is an alternative way of looking at things
  • For while absorption costing treats production overheads as a product cost by assigning a share of these […]
Comments Off on Marginal Costing: Introduction

Uses and Limitations of Absorption Costing

By |2018-09-18T09:54:43+00:00August 16th, 2018|Cambridge AS A Level Accounting, Notes, ZIMSEC A Level Accounting|

Cambrige AS and A Level Accounting Notes (9706)/ ZIMSEC  Advanced Accounting Level Notes: Absorption Costing: Uses and Limitations of Absorption Costing

  • According to research by CIMA the leading Management Institute
  • Traditional costing methods such as Absorption costing are still in widely used by manufacturing businesses throughout the world
  • There is are reasons for this

Uses/Advantages of Absorption costing

  • Often used […]
Comments Off on Uses and Limitations of Absorption Costing

Absorption Costing: Statement of Profit Worked Example

By |2018-08-16T08:52:26+00:00August 16th, 2018|Cambridge AS A Level Accounting, Notes, ZIMSEC A Level Accounting|

Cambrige AS and A Level Accounting Notes (9706)/ ZIMSEC  Advanced Accounting Level Notes: Absorption Costing: Statement of Profit Worked Example

The Question

Zambe Ltd produces […]

Comments Off on Absorption Costing: Statement of Profit Worked Example

Absorption costing:Statement of Profit or Loss

By |2018-08-11T09:14:49+00:00August 11th, 2018|Cambridge AS A Level Accounting, Notes, ZIMSEC A Level Accounting|

Cambrige AS and A Level Accounting Notes (9706)/ ZIMSEC  Advanced Accounting Level Notes: Absorption costing:Statement of Profit or Loss

  • Profit is the overriding aim of most businesses and for this reason management accountants do also prepare income statements (also known as statement of profit or loss)
  • Although similar in spirit to the Income Statement prepared by Financial Accountants it […]
Comments Off on Absorption costing:Statement of Profit or Loss

Absorption Costing: Over and Under-absorption

By |2018-08-10T11:35:49+00:00August 10th, 2018|Cambridge AS A Level Accounting, Notes, ZIMSEC A Level Accounting|

Cambrige AS and A Level Accounting Notes (9706)/ ZIMSEC  Advanced Accounting Level Notes: Over and Under-absorption

  • As has been said before overhead absorption rates are calculated in advance
  • The formula for getting an overhead absorption rate is:
  • \text{OAR=}\dfrac{\text{Budgeted Production Overhead}}{\text{Budgeted Level of Activity}}
  • The budgeted level of activity can be units,labour hours, machine hours etc
  • It is […]
Comments Off on Absorption Costing: Over and Under-absorption

Absorption of Overheads: Solution to Reapportionment of service costs question

By |2018-08-10T09:30:50+00:00August 10th, 2018|Cambridge AS A Level Accounting, Notes, ZIMSEC A Level Accounting|

Cambrige AS and A Level Accounting Notes (9706)/ ZIMSEC  Advanced Accounting Level Notes: Reapportionment of service costs where there is interwork

  • This is a solution to the question found here
  • First we will use the repeated distribution method to redistribute service costs
  • Lastly we will use the algebraic method to reapportion costs
  • We have already looked at why […]
Comments Off on Absorption of Overheads: Solution to Reapportionment of service costs question